Success Story: Here’s How Audit Insurance Can Save You From Unexpected Tax Fees
Even if you are diligent when lodging your tax return, you may find yourself at the mercy of the Australian Tax Office (ATO). The ATO contacts around 350,000 Australians each year in regards to tax returns.
The question then becomes – what can you do to protect yourself from unexpected fees?
A taxpayer lodged a tax return with income from multiple rental properties. Deductions included repairs and maintenance. The taxpayer also claimed a portion of personal use on one rental property.
Why they needed Audit Insurance:
The ATO reviewed the taxpayer’s tax return and concluded that the deductions were substantiated. The taxpayer did not owe additional taxes due to the tax review. However, the taxpayer did incur fees of $7,500 for professional services in relation to the cost of audit.
While lodging the tax return, the taxpayer purchased audit insurance through Audit Shield. When the forced audit was completed, the taxpayer filed a claim.
When the taxpayer filed the claim, Audit Shield covered the total costs of the incurred professional fees.
All our clients at Scott Partners are eligible to access our Audit Shield service. You can choose from different levels of coverage depending on whether you are a salary and wage earner or if you need coverage for a business. Coverage begins one business day after we receive your payment.
Audit Shield covers any audit, enquiry, investigation, or review that the Australian Taxation Office (ATO) or another relevant government revenue agency instigates to ensure compliance with tax and legislative requirements. We can help you work through auditing regulations to reduce the chances of an audit, but government revenue agencies focus more and more on audit activity. Even if you are not at fault, as the above scenario shows, you can be audited and incur representation fees.
Audit Shield covers many lodged returns, such as Capital Gains Tax, Employer Obligations – Superannuation Guarantee, Fringe Benefits Tax, Income Tax, Payroll Tax, and many others. There are limitations, however. Audit Shield’s audit insurance does not cover action you make due to government notices that are purely educational or advisory but do not compel you to act, or cases where the penalties are 75% or more, or if the return is deemed to be fraudulent. Before you participate in Audit Shield, you should look at the full list of covered and excluded returns and scenarios.
Participating in Audit Shield is as important as covering yourself with other types of insurance. It helps protect you against unexpected expenses.
To find out if you should participate in Audit Shield, contact Scott Partners today.