Voluntary Disclosure for Honest Mistakes
If you have made an error relating to your tax obligations, it can be dealt with by making a voluntary disclosure. Voluntary disclosures are free choices made on the part of an individual or organisation to provide information to the ATO on any information that relates to your tax obligations. These disclosures are generally in relation to any mistake, error or omission (intentional or accidental) that has occurred in providing tax related information to the ATO.
Disclosures will only be treated as being made voluntarily if it is made without having been prompted by the ATO. There are a number of options available for making a voluntary disclosure. These include:
• in writing
• by phone, or
• via other methods which are available in specific circumstances.
Why voluntarily disclose to the ATO?
The likelihood of facing tax related offences are increasing as the ATO is continuing to expand their ability to identify over-claimed entitlements and under-reported or omitted information. However, the ATO has expressed its willingness to work together with taxpayers who make an effort to get their affairs in order. If you find an error or omission has been made, it’s important to correct the information and make a voluntary disclosure to the ATO.
Although the Offshore Voluntary Disclosure Initiative (OVDI) closed on 30 June 2010, taxpayers who have not disclosed any income or capital gains or who have over claimed deductions are still able to come forward and make a voluntary disclosure to the ATO. By making voluntary disclosures, you and your business can still benefit from significant incentives by taking an honest approach and informing the ATO of any non compliance.
Voluntary disclosures are effective ways of minimising the impact of any penalties by improving the chances of penalties and interest being reduced. By addressing any issues you may be experiencing with the ATO, voluntary disclosures will stop the problem from getting worse, and expose you to other benefits such as improving the likelihood of avoiding:
• Serious civil and criminal penalties
• Criminal Investigation,
• Extensive ATO audits, and
• Significant legal fees.
It is important to address these issues early, as delay will only make your situation and the consequences worse. The level and opportunities of any reduction of penalty depends on when a voluntary disclosure is made. Generally a greater reduction is made when the disclosure is made before the ATO notifies you of an audit. However it is critical to understand that a taxpayer who has made a voluntary disclosure is not automatically exempt from prosecution and other penalties.
At Quinns, we can manage any necessary issues you may be experiencing with the ATO. If voluntary disclosure isn’t the right alternative for you, there may also be other options which we can help you with. These options will vary depending on the facts of your circumstances. Why not set up a meeting to discuss your matter further at one of our 5 convenient offices or alternatively through a Skype meeting. We can confidentially discuss how to best proceed with your matter. Contact us on 1300 QUINNS (784 66&) or on +61 2 9223 9166 or submit an online enquiry form.