The ATO has been granted significantly more funds to crack down on tax evasion this year. They will be casting a broad net (with a particular emphasis on trusts) so almost anyone could be targeted for an audit.
Audits can be costly. We perform them for clients and see the strain it can have on an individual or business. For this reason, audit insurance could be a good investment for you this year.
How Does the ATO Decide Who to Audit?
There are a number of ways that the ATO selects those to be audited. Often they can be types of activities they are targeting or an error that the ATO deems suspicious. This means that even if you are doing the right thing, you can still be audited. In fact most people that we perform audits for are not evading tax.
What is Audit Insurance?
Most audit insurance covers you in the event that the ATO requests a formal audit. The type of audit insurance that we can provide you with does not just include a formal audit. You are covered for our accounting fees in the event you have any of the following requests from the ATO:
- Official enquiry
- Audited of returns lodged with the Australian Tax Office or other Federal, State or Territory government authority, agency or body.
Why Should I Get Audit Insurance?
We see many clients without audit insurance struggle with the costs of an audit. This is particularly relevant to businesses, individuals with multiple investments or complex ownership structures. If any of those situations apply to you or if you are part of a trust, audit insurance can save you a lot of money and stress.
Ask us if audit insurance is a good idea for your situation.
The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.