Not likely. Most people who come up short in an ATO audit will be facing financial penalties rather than custodial sentences.
Ok, so how do I fix this?
So let’s assume your actions weren’t deliberate. We need to review your situation and work with the ATO to resolve it, with the best possible outcome.
What every company being audited needs to know
First of all, it’s important to understand why you are being audited. It is not completely random, it is randomised from a sample of businesses deemed to have raisk factors. It may be as simple as you have bought a company car (which is the most common reason) or something more serious like an employee complaining about unpaid super.
We need to establish an approach
We need to review your accounts to see if there are any discrepancies. If we know why they are looking at you, then we know what that are looking for. The best course of action is to find it, and voluntarily disclose the discrepancy.
Should I have representation?
It’s completely up to you, but it’s always better to have a professional handle these matters to ensure the best possible outcome. We’ll make sure your cicumstances are correctly communicated and any mitigating factors properly advised.
What kind of penalties can I expect?
Fines for taxation offences are generally tied to the amount of tax that was avoided or not paid. The degree of culpability or recklessness will determine how big the penalty is compared to the amount of tax avoided. The Base Penalty is the amount of tax that you avoided by your mistake or recklessness, and the percentage of the base penalty amount applied will depend on the circumstances around the error.
Failure to take reasonable care to comply with a taxation law.
Recklessness by you or your agent as to the operation of a taxation law
Intentional disregard of a taxation law by you or your agent
What if I discover I have made a mistake?
Come clean. It is always better to come clean at the earliest possible time and communicate your mistake via a tax agent. If it’s a minor mistake and not reckless, then there’s a good chance you’ll be warned and watched. If you were reckless or negligent, there will likely be a fine to pay.
Can I get more time to respond?
The ATO have to give you reasonable amount of time to respond to their queries, so that you can gather necessary records and obtain representation. We can usually get you an extension so that we have sufficient time to review your case and properly advise you.
What are you waiting for?
Make it my problem, not yours. Get in contact with me today and I’ll review your case and get it resolved.