Tax Audit Insurance
DGL Accountants now offer clients cost effective tax audit insurance that will cover the cost of our time to assist you in dealing with the ATO and other government authorities, should you be subject to an audit, up to the value of $20,000. The insurance does not cover any additional tax, fines or penalties that may be imposed by them.
The insurance covers the cost of DGL’s time to assist you in dealing with the ATO or others should you be subject to an audit up to the value of $20,000. It won’t cover any fines or penalties that may be imposed by the ATO.
SO, WHAT DOES IT COVER?
Our average hourly charge out rate is $200+GST so it doesn’t take long to end up with a substantial bill in an audit situation.
Each person is different and the ATO has improved its data matching capabilities in recent years. They have highlighted recipients of Early Release of Super and those with high travel or working from home expenses and rental properties as a specific audit target area. It is getting harder to get away with anything.
WHAT ARE MY CHANCES OF BEING AUDITED?
The ATO is a bit like big brother as it gathers terabits of big data each year to analyse. Predominately the ATO will compare your income and expenses to those in the same occupation and flag anomalies. If you have a rental property, they will compare average income & expenses of similar properties in the region. The information that the ATO gets isn’t just your Employer Income Statements, bank interest & dividend details - all major purchases/sales are now being reported electronically to the ATO including shares, property, vehicle purchases/sales or registrations, there isn’t much that they don’t have access to even so far as your debit & credit card transactions. The ATO uses this data to compare your lifestyle spending and assets against your reported income to check not only for excessive deductions but also for things like unreported cash/gig economy income.
HOW DO THEY CHECK UP ON ME?
Any Audit conducted by:
WHAT TYPES OF AUDITS ARE COVERED?
- the Australian Taxation Office; or
- any other Australian (Federal, State or Territory) government authority or agency that can perform an Audit in relation to taxation, duties, levies or other such statutory imposts such as payroll tax in connection with a Return lodged by our office.
There is a full list of exclusions available at our website but predominately it is the following;
WHAT IS NOT COVERED?
- any prior or pending audits or if your returns are more than 3 months late without prior extensions being in place.
- any fraudulent, dishonest, criminal or malicious act or omission
- any false, misleading or deliberate evasion or recklessness
- if you are part of any marketed or mass marketed tax avoidance or tax minimization scheme or arrangement unless it has received a product ruling from the relevant agency
- if you are bankrupt
DO I HAVE TO PAY AN EXCESS IF I MAKE A CLAIM?
No but – if the time exceeds the audit limit of $20,000 you will be asked to pay anything over and above.
DGL are here to help you, please let us know if we can be of assistance.
The Team at DGL Accountants