Tax Audit and ATO Audits

Tax Audit

Recently the Australian Taxation Office (ATO) has recorded an all-time high for tax audits with the main focus being businesses turning over $1-$3 million dollars. Their ability to cross reference tax information declared against Workcover, Centrelink, Department of Transport, superannuation funds, banks and other financial institutions has increased in leaps and bounds.

Tax Audit | Yes or No

What can trigger an ATO Tax audit?

1).  Many tax audits are triggered by tip offs by an employee or concerned citizen or your industry may be the ATO’s focus for that period of time. An Audit can be as simple as providing some receipts or can be more involved taking 3-4 years to resolve with quite significant costs to the business, even if you are proved to be in the clear.  So what can trigger an audit?

2).  Businesses that are considered by the ATO to receive cash, such as small retail shops or take away shops etc. that don’t declare accurately their cash income, will show unusually high  expenses and peak the interest of the ATO.

3).  Unhappy employees or suppliers may anomalously contact the ATO to complain about unpaid goods or unpaid super and what starts off as an investigation into that matter can quickly lead onto an tax audit if your business does not present as an ethical entity.

4).  If your business performs well above or under the standard business model for your industry (set by the ATO) it could raise a red flag that your business may have taxation returns that has not been declared correctly.

5).  Reporting discrepancies between FBT, PAYG, BAS or IAS will attract the ATO’s attention.

6).  If your business is in the news for any reason, positive or negative, the ATO may start to look closely at you.

7).  Overseas transactions, especially to tax haven countries or where high volumes of transactions occur will likely attract attention.

8).  Business involved in internet market places such as Ebay and Gumtree are monitored.

Your Business and Your Accountant

How do I avoid an Audit?

The best way to avoid an ATO taxation audit is to do the right thing and use highly experienced accountants such as the team at TJD Accounting Services, who offer qualified service and assistance with all your tax obligations.

TJD Accounting Services

319 Keilor Road


VIC 3040

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