At CBSW Tax and Business Advisors, we are specialists in tax audit management, and our experienced team are familiar not only with the intricate Australian taxation system but also the process that the ATO follows when auditing or reviewing a taxpayer’s affairs. The ATO (Australian Taxation Office) are continuously implementing and updating procedures to increase their activities in reviewing and auditing taxpayer affairs. The expectation is that more thorough ATO monitoring will continue to escalate in the coming years.
The ATO may select a taxpayer to audit for a number of reasons. It usually occurs when a suspicious activity has been flagged, for example unrealistically high deductions, under-declaring income or through other inconsistent reporting. Even something as simple as continuously missing lodgement deadlines could prompt them to dig a little deeper. If you are in the unfortunate situation where a review or audit has been requested, our team can be there offering support throughout the entire process. We have assisted a number of clients with various federal taxes such as income tax and GST, as well as state-based taxes including land tax and payroll tax.
The starting point in dealing with such ATO activity is to minimise the risk of being selected for an audit of review – which is what we take into strong consideration with our overall service. However, if you are selected for a review or audit, early action is important to achieving a successful result.
The most important element in such a situation is having regular communication with the relevant tax authority, for example, the ATO or State Revenue Office. Not having such open communication can have a detrimental effect and be harmful to a successful outcome. Although we have seen this far too often when others have been faced with such proceedings.
It is essential to maintain good records, and if there is an audit it will make the process simpler if these are readily available. Record-keeping should include maintaining a reconciled accounting system, source documents such as receipts, invoices and by clearly documenting any activities and decisions which have been made. Tax outcomes can be affected by the intentions you had at the time, and maintaining this evidence can be paramount in reaching the correct outcome.
We understand this process can be a daunting and often stressful one. We often hear of situations where the subject of an audit review has delayed taking action in the hopes the matter will go away. Unfortunately avoiding it will only make matters worse, and if this has happened to you our friendly team can assist you in getting back on track.
In addition to the emotional cost of going through a review or audit, there can be a significant financial cost. At CBSW Tax and Business Advisors, we offer a unique service to all of our clients called Tax Audit Insurance. This incurs an annual fee and provides cover for the professional expenses that would otherwise be incurred as a result of this type of activity. The insurance is referred to as ‘Audit Shield’ and is provided by Accountancy Insurance.
For more information on how we can assist you with your tax audit management, or learn more about our tax audit insurance please contact us today. Our office is located in West Leederville, WA and you can phone us on 08 9363 7300