For anyone that has ever received one of those infamous ’brown envelopes’ or digital communication from the Canada Revenue Agency (CRA), you know the uncertainty it can bring. You start by asking yourself; am I in trouble? I haven’t done anything wrong, but what’s this going to cost to make it go away?
In Canada, we have a self-reported tax system. This means our tax authority – the CRA, has a duty to make sure Canadians are filing their taxes, both personal and corporate, correctly, and accurately. On top of this, our tax act is filled with special credits, deductions, and transfers. When the rules are complex; disputes are common.
At any given time, more than 170,000 tax reviews are underway in Canada, often taking up large amounts of time, and money to respond, and resolve. On time, accurately filed, and compliant returns can still be randomly selected for reviews, audits, and investigations by the CRA. Even when the filing position is correct, there is no reimbursement by the CRA for costs you incurred to prove or defend your position.
The time and cost for your CPA accountant to respond on your behalf can be stressful and significant. However, there is a way to reduce the costs and stress of dealing with CRA and provincial tax reviews and audits. It’s called Audit Shield.
Audit Shield mitigates the fees associated with unexpected, inconvenient, in most cases, unwarranted, and often stressful CRA reviews and audits.
The premise of Audit Shield is very simple. Audit Shield is an optional service offered by many proactive Canadian CPA accounting firms that provides for the payment of professional fees incurred when you are selected for a review, audit, inquiry, investigation, or examination of filed returns instigated by the CRA or other provincial revenue authorities.
That means if your CPA accountant offers Audit Shield, and you choose to join the program, all professional fees up to a prescribed limit are paid for when your CPA accountant represents you in those CRA review or audit activity matters. That means no surprise accounting bill for you.
“Accounting firms, and their clients, that have Audit Shield in place have a huge benefit when going through the process of a CRA review or audit,” Roman Kaczynski – Director at Accountancy Insurance.
Not having Audit Shield could prove costly. Simpler matters like personal tax audits can cost a few hundred dollars whereas full corporate audits could easily cost thousands of dollars. In between, there are numerous reviews and audits like GST/HST/PST/QST, payroll, reviews of travel expenses, vehicle expenses, and many more.
The cost of each audit varies on many factors, such as, the size of the business, over how many years these reviews are focused on, what complexity exists in the data, or the transactions being reviewed. There is no price range as each audit is its own unique circumstance.
The good news is that Audit Shield can cost as little as $310 for a Sole Proprietor and their family group per year, which can cover them for up to $10,000 of their accountant’s time to respond on their behalf, which is more than adequate for even the most complicated review or audit in their category.
“A business is usually much more susceptible to a more involved review or audit by the CRA,” Kaczynski says. “Having Audit Shield ensures the matter is delt with thoroughly. This means that the client, nor the accountant, needs to cut corners to keep the time, and cost, down.”
The Audit Shield team is already seeing the CRA return to full capacity and indeed claim numbers from CPA accounting firms responding to this review activity, are up when compared to pre-Covid levels. This is expected to continue as the CRA begins to review the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS) – reviews of which are both covered by Audit Shield.
About Accountancy Insurance: Accountancy Insurance has been around in Canada since 2016, specializing in Audit Shield. With a proven track record of 20 years established down under we have the history and depth of knowledge to ensure Audit Shield has you covered when it matters.
Don’t let the CRA you CRAzy! If you are interested in Audit Shield, ask your CPA accountant for more information. Send your CPA an email introduction on Audit Shield by clicking here, or visit https://www.auditshield.info/.