Library
ATO maintains compliance vigilance
Sunday, 20 July 2008
Budget 08 allocated increased funding to support the Australian Taxation Office’s compliance initiatives with $257 million allocated over the next four years. These include targeting owners of luxury cars over $57,000 with ATO statistics revealing that 25 per cent of these people have not lodged a tax return.According to According to Shaun Reeves of Brisbane member firm SRJ Walker Wayland, the ATO is looking to build on the success of compliance programs such as Wickenby.
“While only three cases have been successfully prosecuted under Wickenby, a significant amount of work is being done by the ATO which requires more resources to bring these cases to prosecution,” says Shaun.
“What this highlights is the need to ensure all your tax lodgements are up to date and that you make appropriate and full disclosure to your tax adviser of your affairs at all times.
“If you are experiencing difficulty in maintaining your tax lodgements contact your tax adviser as soon as possible to ensure that a level of communication is initiated with the ATO.
“By establishing communication with the ATO in this way, you can mitigate the chance of the ATO commencing action unduly.
In a follow-up to Budget 08, the ATO announced in June that it intends to target share market investors and landlords after audits and data matching uncovered $125 million in undeclared interest and dividends and $50 million in unreported capital gains.
Other targets include executive salary packaging, work expenses (with these now coming in at $13 billion) and executives earning more than $1 million a year.
Small businesses are also included in the ATO’s sights, with 2.5 million small businesses in the tax system to be targeted over their employer obligations, assets sales, investments and offshore income.
“People tend to underestimate the ATO’s research capabilities, particularly when it comes to data matching – some still think they can get away with it,” says Shaun.
“Advances in data matching technology mean the ATO has access to more data than before and this will only increase.
“For example, the ATO already uses data from property registers and recently secured share trading information from the three primary share registries to identify unreported income and capital gains,” says Shaun.
Given this increased ATO audit activity, taxpayers should consider low cost tax audit insurance as a way of mitigating costs in the event of an audit.
Contact your local Walker Wayland business adviser for more information on tax compliance issues.
| < Previous | Next > |
