With the growing number of audits initiated by the Canada Revenue Agency (CRA), we have seen more and more of our own clients’ returns being scrutinized. Preparing a response to the CRA can be quite costly. After investigating how we could make responding to the CRA less painful and less costly for you, we stumbled upon an insurance program called Audit Shield.
What is Audit Shield?
Audit Shield is a new service we are offering all our clients. Think of it as an insurance program that covers the professional fees incurred for representing or defending yourself or your business against a CRA audit, enquiry, investigation or review.
Instead of paying an hourly fee for us to prepare a response to the CRA, you simply pay an annual fee and you are covered against a future audit or review for the year you are covered.
How does Audit Shield work?
If your filed return has been selected for an audit, enquiry, investigation or review, and you participated in Audit Shield, it will essentially cover our fees to respond to the CRA. It was also cover associated fees from lawyers or other professionals if they are required. Coverage extends to all client tax filings, which would include:
Personal Tax (post Assessment T1)
WorkSafe BC Worker’s Compensation Employer Audit Programs
Note that it does not cover audit, enquiries, investigation or review for which you were notified before participating in Audit Shield.
How much does it cost?
Annual fees are based on who is covered and, for a corporation, your gross revenue.
For the 12 months that will end in June 2018, the price ranged from $136 for simple and single personal tax return, to $4,022 for a business with gross revenues between $75 million and $100 million.
We know that is a big range. To bring it closer to home, for a business with gross revenue of under $1 million, the annual fee would have been $394 for the year. In most cases individuals and other related entities can be covered with the business entities – for no extra cost.
All the participation and fees are based on a July 1st to June 30th cycle. The cost is pro-rated if you join partway through the cycle.
For businesses, the annual fee is tax deductible.
What do I need to do to participate?
If you have not received details on your coverage options and are interested, please reach out to us.