The Australian Taxation Office (ATO) is responsible for ensuring that everyone pays the right amount of tax.
A tax enquiry or audit is an examination of your tax affairs by the ATO to see if you have done what you are required to do under the tax laws, including whether you:
• Have declared all the assessable income you receive
• Are entitled to the deductions and tax offsets you have claimed on your tax return.
If you are being audited by the ATO sometimes it only involves a phone call or letter asking you to provide further information in order to verify your claims. In some cases, depending on the complexity of the audit a tax officer may visit you at the company’s registered office.
Each year the ATO indicates what occupations it will be targeting for the financial year. For the 2011/12 financial year the ATO has indicated it will be paying closer attention to deductions claimed by individuals employed as plumbers, information technology managers and defence force non-commissioned officers.
The ATO is also continuing to investigate high income earners involved in tax avoidance schemes, with particular focus on widely-marketed financial products that promise substantial tax benefits as well as investments by medical practitioners.
It is quite possible that your tax return may be audited by the ATO without your knowledge. The ATO receives information from a number of sources as a matter of course. For example banks are required to give details of how much interest each account has earned in the financial year. With this information, it is a simple check to see whether or not taxpayers have declared the interest in their return.
It is vital that you make sure all your assessable income is included in your tax return and that all necessary receipts are stored in a safe place for any deductions you have or will claim if you don’t want the ATO knocking on your door.
If you are being audited by the ATO, our experienced accountants and lawyers at The Quinn Group can assist you in providing advice and answering your queries. Complete an online enquiry or call us on 1300 QUINNS (1300 784 667) or +61 2 9223 9166 to arrange an appointment.