How To Protect Against Additional Fees Related To CRA Audits
January 15, 2020 aadolphAudit Insurance
Few things are more stressful for a small/medium business than finding out that the CRA or other provincial revenue agencies want to do an audit. Audits are time consuming and the cost of being properly represented in these matters can be quite significant. CRA auditors, in particular, are under insane pressure to assess taxes.
Are you in a high-risk industry?
No business likes to be selected for an audit. There are certain industries that the CRA is particularly interested in scrutinizing. In British Columbia, anybody in the construction, property development, and the restaurant industry has been receiving extra attention lately.
Tax audits targeting larger corporate groups and wealthy individuals receive more publicity, however, the reality is that most of the increase in audit activity is focused on individuals and small to medium businesses.
Audits can need the help of a specialist
On finding out they are being audited, most business people will call their year-end accountant and get their assistance to guide them through what to do next. Most accountants need to charge their clients additionally for the time it takes to respond to the audit. This is often an unexpected cost for the client and, depending on the complexity of the audit, can be quite costly.
During an audit,there can be times that your accountant may need to call in a specialist. They may need to seek advice from someone who has experience dealing with government audits and knows all the policies and procedures that are supposed to be followed.This also incurs additional charges that can quickly add up.
Some accountants will service the audit for a minimal fee, but this usually means putting the auditor in a room and pointing to boxes of invoices. Having been a CRA auditor for too many years, I can tell you that this is definitely not what you want.
What you really want is for your accountant to be able to carry out all the necessary work and engage any necessary specialists in order to best represent you, but without passing on all the additional fees associated with that representation.
Introducing Audit Shield
Wouldn’t it be good if there was a solution to make sure you aren’t subject to the additional fees from your accountant in the event of an audit initiated by the CRA or other provincial revenue agencies?
Well, now there is. It is called Audit Shield and is available through accounting firms that have included this into their suite of value-added offerings.
Audit Shield provides for the relief from payment of professional fees, up to a prescribed amount, that you incur in the event you are subject to an audit, enquiry, investigation, or review by the CRA or other provincial revenue agencies.
Your accountant’s professional fees and any other specialist professional advisor fees your accountant engages in matters relating to the audit are included up to the prescribed amount.
As far as I know, Audit Shield is the only service of this kind in Canada. And when it comes to a full-on audit, you want the best solution available. If you know of anybody else who offers this type of product, please drop me a line.
What does it cover?
Audit Shield is retrospective, so it includes all previously filed returns. This is provided that payment is received prior to the notice of audit activity.*
A few examples of what Audit Shield protects against:
- Corporate Tax Reviews
- Post Assessment Personal Tax Enquiries
- GST/HST/PST/QST Reviews
- CRA Employer Compliance Audits
- Plus many other relevant matters
Sounds terrific! Where do I sign up?
You can only purchase Audit Shield through your year-end accountant, the one who prepares your tax returns. For more information about Audit Shield, contact your accountant to find out if they offer the service, or visit https://www.auditshield.info/
Disclaimer: This information is for your consideration only. Gateway Tax is not affiliated with Audit Shield and makes no claims as to their performance.
*The service is limited to the detailed terms and conditions which are provided prior to acceptance.
Andrew Adolph is a CPA and former CRA auditor with 25 Years of experience. He helps businesses to not par any more in sales taxs than the law says they must and acts as an advocate for you if you are being audited, so you can fous on your business.