In its 2019 budget, the Government of Canada committed over $150 million over five years to fund new audit programs and extend current ones. Defending yourself from a CRA audit can be costly and time consuming, even when you are right. That's why we started offering Audit Shield program a few years ago. Accountancy Insurance, the company helping us offer Audit Shield just released some statistic of CRA's audit activities for 2018.
According to their report, for 2018, the most scrutinized aspects of personal tax returns (aka T1) were medical expenses, charitable donations and moving expenses. For corporate tax returns (aka T2), reviews of class 10 vehicle expenses and professional fees have increased since previous years.
This agrees to our own experience serving you. We can add that, starting in March 2019, CRA also added business travel expense to the mix.
What is an Audit Shield?
Audit Shield is essentially a program that will cover all of the professional fees associated with representing yourself or your business from a tax audit, enquiry or review. It covers both audits from CRA and from the provincial finance departments.
No hourly fees are required only an annual fee which, once paid, you are covered against future audit for the year in which you took part in the program.
How does it work?
If your return has been selected for an enquiry, audit, investigation or review, and you are covered by Audit Shield, it will cover all of our professional fees in our response to the CRA. Audit Shield also covers fees from lawyers or other professionals if they are needed. Coverage extends to all of our clients tax filings, which would include:
Personal Tax (post assessment T1)
Corporate Tax
GST/HST and PST
Payroll
WorkSafe BC Worker's Compensation Employer Audit Programs
Please note that Audit Shield does not cover audit, enquiry, investigation or review for which you were notified before participating in the program.
What does it cost?
Annual fees are based off of who is being covered. For corporations, the cost is based off of gross revenues.
Prices range from $136 for single, simple personal tax returns up to $4,022 for businesses with gross revenues between 75 to $100 million. While this seems like a wide range, a business with gross revenues of under $1 million is covered for only $394 per year. In addition, for businesses, it generally covers all shareholders and other related companies along with the business entities at no added cost.
On top of all that, the annual fees are tax deductible for businesses.
How do I sign up?