I have received a letter from my accountant offering me insurance against Audit Fee's for my SMSF. When I rang I was advised that the fee's could be up to A$10 000,-. Now this part here got me really hot under the collar.She explained that even if my books are all in order and the auditor can not find anything that is not kosher ,I would still be liable to pay their fee's. To me that is either wrong or a total set-up,almost mafia style. Isnt it similar to me beeing incorrectly clocked speeding but then having to pay the fine anyway,since it takes man-hours to process my case ? We could get rid of all our unemployed accountants,if there are any,let them loose on the population and receive auditing fee's with no end.Surely that cant be right,can it ? Has anyone got experience that he/she wants to share ? Thank you Goldhamster
No,not the accountant,although I am sure if there is work involved that has to be done by them they would also add that to my annual account keeping fee's. The way it was explained to me,or ,how I understand it , the fee(fine) would be payable to the Tax Department,no matter weather you are in breach of anything or not.
The Audit Protection Insurance is also probably a tax deduction !?! Its products such as these that have contributed to the mess we are in
Sounds like you are being mislead, or your accountant is a dead shit. This insurance is there to cover any fees charged by your accountant to assist the ATO in their audit or legal fees by a lawyer. No cost are incurred by you from the ATO for doing an audit (apart from penalties for non compliance.... which insurance wouldn't cover) Walk away.
Sounds like the securities department in my state. If they examine my office and find nothing wrong, I still have to pay for the privilege of being examined. Of course if they find anything wrong, the fines are added to the examination fee. My brother buys audit protection with his tax preparation software. It covers the cost of the law firm to handle his audit if he is lucky enough to be selected by the IRS.
Federal government is broke. How do you think they get money in? Increase audit activity! Even if everything is OK, then your accountant/solicitor still has to do work to comply with what the govt wants, so yes, it is not unreasonable to expect they will want to be paid. It's not uncommon (depending how large your business is) for audits to take a few months and in some cases up to a year. Depends on the ATO auditor and how detemriones they are to nail you for something. So yes, even if everything is OK, you still have to pay a fee to the accountant/solicitor. Not saying that is right or wrong but at least there is an option for this audit insurance. Zargor
I have confirmed with the ATO that they don't charge any fees in the event that they audit you. Also my particular SMSF through Esuper don't charge any excess fees in the event you are audited by the ATO.
There is a simple solution to the audit. When you are advised that you are going to be audited by the tax department do what I did phone them and deal directly with the auditor. With an SMSF its not rocket science and as I have recently discovered there is a program called BGL which enables you to do your own SMSF financials and tax return with a bit of training that they provide.
