You have got mail! What to do if the ATO audits you

  Summary judgement: a brief history of the book blurb Prospect

For Literary Novelists the Past Is Pressing NYT

Humanity Is Sloppily, Awkwardly Lumbering Toward Consciousness Caitlin Johnstone

Australia: You have got mail! What to do if the ATO audits you

21 June 2021 

by Nicki McNamara

Kells

Your LinkedIn Connections
with the authors

Australia's self-assessment tax system

The income tax system in Australia is based on self-assessment. This means information you provide to the Australia Taxation Office (ATO) is initially accepted as being true and correct when you lodge your tax return and other forms which disclose a tax liability.

The ATO uses cross-checking technology to assess tax returns which may raise a red flag to the ATO. Taxpayer reviews and audits are the ATO's way of confirming the information is accurate and complies with taxation laws and that the taxpayer has met their obligations.

What to do if your tax affairs are subject to an ATO audit?

Scrutiny by the ATO of your tax affairs is an unwelcome and daunting process. If handled incorrectly, it can lead to additional expense and stress.

1. Stay calm. The letter is likely seeking documentation to support the claims in your return. It does not necessarily mean there is anything improper.
2. Review your position. You need to review your tax position to ensure everything is in order and you agree the disclosures made to the ATO are correct. You may need to seek advice or input from your accountant (your accountant may liaise with the ATO on your behalf). The ATO may want to see your source documents to verify the accuracy of your claims, so have your supporting documentation such as receipts and invoices in order. Some common tax return mistakes include:
3. • Failing to declare or miscalculating income
   • Claiming deductions you are not entitled to

3. Provide factual responses to the ATO. Your answers should be honest and limited to the ATO specific questions. Do not provide more information than asked. If you notice an error or mistake you may need to correct it by lodging an amendment – the ATO looks favorably on self-disclosure.
4. If you do not agree with the ATO audit decision and wish to assess your review options, seek legal advice if representation is required.

Time limit for ATO audit

For most taxpayers with simple affairs (e.g. individuals and smaller businesses), the period of review is generally two years.

For individuals or businesses with more complex affairs, the period of review is generally four years.

The time limit starts on the date the notice of assessment is issued by the ATO.

There is no review time limit if the ATO considers the taxpayer's actions are tax fraud or tax evasion.

What documentation should I keep on file?

The best outcome of an ATO audit is being able to show to the ATO that your tax affairs are in order, and you have complied with your tax law obligations. To do so, good record keeping and being able to provide supporting documentation such as financial statements, schedules, contracts, tax reconciliations is important.

Most documentation and records should be kept for a minimum of 5 years, with information relating to CGT assets to be kept for the time the CGT asset is held plus 5 years.

It can be best practice to keep documentation indefinitely, as the ATO review period is open if it is considered there is tax fraud or evasion.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Policies That Make the Poor Less Poor

 

Chamber of Commerce urges Biden to double visa quota amid nationwide worker shortageYahoo News. Good to see the CoC finally coming out in support of open borders

 

‘When is this going to end?’: US factory town devastated by jobs moving overseas Guardian (Re Silc). The town is in West Virginia, so why not see what President Manchin can do?

 

Policies That Make the Poor Less PoorEclogiselle

 

America Should Become a Nation of RentersBloomberg

 

Tasks, Automation, and the Rise in US Wage Inequality Daron Acemoglu & Pascual Restrepo, NBER. 

 

Capital for the people — an idea whose time has come FT

 

Bacteria converts degraded plastic bottles into vanilla flavoring New Atlas 

Enthusiastic Amateurs Advance Science As They Hunt For Exotic Mushrooms NPR

NEWS YOU CAN USE: Particularly if you’re in the corporate boardroom and letting Twitter flamewars dictate company policy.

Why, it’s like “Twitter sentiment is a Styrofoam iceberg. You may think 9/10 of it is underwater, but actually, 9/10 of it is visible,” to coin an Insta-phrase. Somebody should write a book about this stuff.

THE 50-100 PAY GAPThese 20 Harsh Facts About Income and Wealth Inequality Will Shock You Capital & Main

California Has a Plan to Pay the Back Rent for Low-Income Tenants. All of It. NYT

Tabloids Want Crime, Not Rent, on NYC Voters’ Minds FAIR

Amazon Workers Call for Strike on Prime Day in Germany Motherboard

Amazon Prime Day Is a Nightmare for Amazon Workers Jacobin

Why Are Billionaires Presumed Innocent? Daily Poster, David Sirota.

Google Faces EU Antitrust Probe of Alleged Ad-Tech Abuses WSJ

Biden’s Antitrust Revolutionaries Project Syndicate

Tucker Carlson And Media Elites Cozy Up To Private Equity Moguls Daily Poster

 EVERYONE’S IN FAVOR EXCEPT FOR THE POLITICAL CLASS. I WONDER WHY? Landslide: 80% support photo ID for voting, including 62% of Democrats and overwhelming share of minorities.

Taking Delegating a Bit Too Far   In 2006, a report published in Inc.com concluded — ridiculously — that productivity losses cost U.S. employers more than half a trillion dollars — $544,000,000,000, to be a little more precise. The report found that in an eight-hour day, employers spent an average of 1.86 hours “on something other than their jobs, not including lunch and scheduled breaks.” And of those surveyed, 52% “admitted that their biggest distraction during work hours [was] surfing the Internet for personal use.” The data is garbage, of course; the idea that employees should be always-on and that anything less than that is going to result in productivity losses isn’t based in science or reality. But every once in a while, there’s an example of an employee who goes to the extreme, not doing much work and perhaps none at all. Take, for example, the story of a former software developer identified by the press only as Bob. Bob’s schedule — determined by a retrospective look at his Internet browsing history — consisted of the following (as relayed by NPR): 9:00 a.m. – Arrive and surf Reddit for a couple of hours. Watch cat videos 11:30 a.m. – Take lunch 1:00 p.m. – Ebay time. 2:00 – ish p.m Facebook updates – LinkedIn 4:30 p.m. – End of day update e-mail to management. 5:00 p.m. – Go home Curiously missing? Work. Apparently, Bob didn’t do any. That didn’t match up with Bob’s output, though. As TheNextWeb reported, Bob “apparently received excellent performance reviews, even being hailed the best developer in the building: his code was clean, well-written, and submitted in a timely fashion.” He was, somehow, producing great work without actually working. Bob’s employer didn’t seem to notice that he wasn’t doing any work, because from the corporation’s vantage point, he was productive. But Bob’s employer did notice something else. Weird computer traffic was coming into the company’s servers through Bob’s remote login credentials, and importantly, the traffic seemed to be coming from China. To make matters even stranger, the Chinese connection via Bob’s remote connection was active while Bob was sitting in the office. Baffled — why would Bob be logging in remotely, and from China, while he was right in front of them? — the company contacted Verizon, its telecom services provider, and asked them to investigate. Verizon got to work and came to the root of the problem. While Bob’s employer had assumed that some odd sort of malware had infected their systems, that wasn’t the case. Verizon determined that the problem was Bob himself — and it explained how a guy with great performance reviews matched up with that schedule of cat videos and shopping on eBay. Bob had outsourced his own work to China. The plan was pretty simple: Bob had hired a consulting firm in China, sent the consultants the work assigned to him, and then got out of the way, collecting paychecks the whole time. The Chinese workers did the rest — including returning the completed code to Bob’s employer’s servers. (Bob could have masked the scam a while longer if he had done the check-in work.) Verizon concluded that Bob had most likely been doing this for a few years, taking about a quarter of his pay and using it to buy the services of lower-cost providers overseas. Bob was fired, of course — the employer was working on developing software for the U.S. government and outsourcing that to China isn’t acceptable — but Bob probably laughed all the way to the bank. According to the Verizon security team, this wasn’t Bob’s only job — and it probably wasn’t the only job he had outsourced. Bob was making “several hundred thousand dollars a year” per Verizon, and “only had to pay the Chinese consulting firm about fifty grand annually.”     Bonus fact: Give a customer service number a ring and there’s a good chance your phone call will be connected to a representative stationed outside the United States. But there’s an increasingly decent chance you’ll find someone in the U.S. on the other end of the phone. The reason why? Many companies have found a low-cost, domestic solution (with dubious ethics): prison inmates. According to CIO.com, prisoners earn about $1 an hour to provide low-level support to customers in need. From the Archives: Free For Me But Not For Thee: Another software developer scam.       Share Tweet Forward