ATO audit advice

Has the ATO selected you for an audit?

If so, they have probably sent you a long of the things they want you to provide.  Your heart probably sunk at the thought of having to deal with the ATO when you have better things to do with your time.  That’s where we come in.

Our accountants have had a considerable amount of experience dealing with ATO audits and in most circumstances our clients have been extremely happy with the outcome.

What’s involved with an audit?

  1. The first thing you will receive is a letter from the ATO advising you of the audit and the information they require.  This letter may have come via our office or may have been sent directly to you.
  2. If you have received it directly your next step is to send us a copy of the ATO notice.
  3. We will review the notice and discuss with you what information they need and the required time frames.
  4. If it is a fairly straight forward audit that can be dealt with by supplying a few documents to the ATO then we will deal with the matter at no charge to you.  This is quite often the case for GST audits where you have purchased a large asset and are trying to claim back the GST.  On most occasions the ATO accepts the information provided and that’s the end of the process.
  5. In recent times, however, the ATO have been conducting more complex audits.  Their internal detection systems are becoming more sophisticated and as a result they are targeting more businesses that they consider to be “outside” the usual business parameters.
  6. If the audit is a bit more complex and we need to provide more information and explanations to the ATO, then we will provide you with an estimate of fees to act on your behalf. This fee is typically in the range of $1,200 – $2,500 depending on what is required.

What if we don’t agree with the ATO’s audit decision?

Despite giving the ATO all the information they requested during the audit, they sometimes get it wrong.

If this is the case we will discuss with you whether a formal objection is warranted. The formal objection contains a lot of the same original information provided during the audit process together with additional information and explanations as to why we feel the ATO were incorrect in their initial audit assessment.

This step is often more complex and costly as we will have to explain your position with reference to the various sections of the income tax legislation and compare your circumstances to similar ATO rulings and case law.  This objection can be quite time consuming and is likely to cost between $5,000 – $10,000 depending on complexity.

If this formal objection review is unfavourable, you may choose to take the matter further. This will involve taking the matter to the Administrative Appeals Tribunal which is an independent arbiter between the client and the ATO.  It typically does not get to this stage, but if it does, we will advise you of the best course of action.

What’s the next step?

To arrange a meeting call our office on (07) 3160 7386.We will sit down with you for a one hour meeting in our office to discuss your position and options.

While you are calling, check out the following blogs and pages

Audit insurance