Question:
What is Audit Shield?
Facts:
Audit Shield is an insurance program for the cost of defending an audit. Audit Shield Accountancy Insurance partners with more than 2,700 accounting firms throughout Canada, Australia and New Zealand to offer insurance for the professional fees incurred as a result of a government tax audit.
With the growing number of audits initiated by the Canada Revenue Agency (CRA), there is a greater risk of our clients being audited. Our ability to serve you in an audit is greatly limited by the limited engagement we perform. In our experience, defending even a straightforward audit can be costly.
We considered alternatives on how to address this risk and cost and found a solution in an insurance plan called Audit Shield. We carry an insurance policy with Audit Shield and offer a mirror of this policy to our clients. We match each of our clients with an appropriate amount of insurance based on the level of sales in the corporate group and send a letter with details of the corresponding insurance premium each fall. A prorated coverage is available for clients a few months after the commencement of the policy for new clients or clients who previously denied the insurance but have since changed their minds.
Coverage includes all related parties in a corporate group including the shareholders personally. Coverage includes the professional fees for responding to and defending written notifications of a CRA audit, enquiry or review. This includes corporate tax filings, personal tax filings, SR&ED filings, payroll filings, WCB filings and GST filings. Annual fees range from $350 to $2,500 for insurance with maximum coverage ranging from $10,000 to $35,000 per year.
If you would like more information on this topic, please contact a member of the Empire CPA team by filling out the contact form below.
Canadian and foreign tax laws are complex and have a tendency to change on a frequent basis. As such, the content published above is believed to be accurate as of the date of this post. Before implementing any tax planning, please seek professional advice from a qualified tax professional. Empire, Chartered Professional Accountants will not accept any liability for any tax ramifications that may result from acting based on the information contained above.
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