Wilson Pateras can help to ensure your full compliance with ATO legislation. We can also help you to prepare for an ATO audit meeting if you are targeted, as well as liaise with the ATO on your behalf and attend the meeting with you. Discover over 50 tax deductible items you can claim in your next tax refund. Simply fill in your details and we will send this checklist to your inbox.
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Liability limited by a scheme approved under Professional Standards Legislation, other than for the acts or omissions of financial services licensees. Payments Contact Us 03 Complimentary Consultation. Blog Menu. It is important to understand what triggers an ATO audit. Below are five common triggers. Getting the numbers right and input into the right categories takes work, even for the experts.
They might ask for bank statements and written confirmation from employers to back up your claims. The ATO has been known to call previous employers for information relating to claims made. Having a good filing system and backing up all of your records electronically to stay organised will help you prove your claims.
You must keep your records for five years. You could merely make an honest mistake on your tax return, but the key is to be organised and truthful. By keeping up with your finances throughout the year, tracking your receipts, payments and income forms as you go, using a professional software program and waiting to file when you have all of your income and expenses information finalised for the year will result in a smooth tax return.
We seek your cooperation so we can complete audits as quickly as possible and give you certainty of your tax and super position. Most audits are escalated from a review. However, where it is warranted we may proceed straight to audit without conducting a review. This may happen, for example, in cases involving less complex issues, or where we suspect fraud or evasion, or where an arrangement or transaction is considered high risk. When we contact you in an audit we want to establish a productive and professional working relationship built on transparency.
We will be open with you about what has attracted our attention and provide you with an opportunity to disclosure errors and provide information where needed.
We will normally examine source documents to verify the accuracy of financial accounting information and the integrity of access controls within your systems. Where our discussions with you and our analysis of relevant information are sufficient to address our concerns, we will end our audit and advise you of the outcomes.
These discussions will be formalised in an updated audit management plan, which we will provide after the meeting. The audit management plan will contain contact details of an executive level officer for you to contact. If we identify additional risks during an audit, we may broaden the audit's scope. We will advise you immediately if we decide to broaden the scope of an audit. We will engage in ongoing and transparent communication with you as our view develops. At any stage during an audit, we are open to exploring opportunities for alternative dispute resolution as a cost-effective means of avoiding potential legal disputes.
Holding the ATO to account by ensuring they stick to the scope of the ATO audit and having this request made in writing will ensure that you are protected appropriately. Another important thing to note is that the ATO is an external auditor and will not know the ins and outs of your business as well as you do.
They do not always get things right due to the complexity of tax laws and the tax systems. It is expected that the ATO keeps you informed throughout the audit process. Once an audit management plan has been established, you or your accountant will be given the contact information of a case officer who you can liaise any communication with.
Often, an ATO audit may begin with a specific risk hypothesis in mind but may also expand to a much larger scope as the investigation evolves. Again, having an accountant or experienced tax agent can help immensely with whether you should provide additional information or not in such circumstances.
Generally, you must keep written records and evidence of how you arrived at a certain number in your tax return for five years from the date you lodge your tax return. These can be kept in either paper or digital formats in a true and clear copy of the original.
This will generally outline:. This is an opportunity for any comments or disagreements to be voiced before a final decision is made. An independent review can often be raised requested to ensure that the decision is impartial. If an outcome or decision as a result of an ATO audit does not result in your favour and you do not agree with this decision, there are options to dispute this.
In cases where direct contact with the ATO does not make any progress, an alternative dispute resolution ADR is an option that can be taken that involves a third party to assist in resolving the dispute. Settlements are a consideration during an ADR process if the ATO considers the decision to settle consistently with good management of the tax system. As the ATO generally has time constraints and a budget to work within, a settlement can sometimes be the better alternative than a prolonged litigation case.
In-house facilitation is another option where an impartial ATO facilitator meets with both parties to mediate the issue in dispute and develops options for alternative resolution. All individuals and businesses have a right to object some decisions made by the ATO including assessments, rulings and penalties enforced.
All objections are to be submitted in writing to the ATO where it is reviewed by a review officer from the Review and Dispute Resolution department which operates independently and objectively from the audit department.
For more information and details on the exact details of this process, click here. To find out how you can lodge a complaint or objection, click here. According to tax laws, interest is calculated and enforced from the date a tax liability was accrued while penalties are imposed if the ATO deems that there was an unsubstantiated claim or omission on your tax return. Just like bank interest charges, if there is an amendment that needs to be made on your assessment that results in a tax shortfall, then interest will also be applicable from the date of the original assessment that was due to be paid.
This is generally to discourage individuals and businesses from taking advantage of this situation.
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