There are few things more frightening than that unpleasant little envelope that has your notice of an impending audit. It’s not just embezzlers and fraud who get audited; these days, anyone is subject to examination. An audit (also known as a review), will help the ATO determine whether or not you properly declared all income, are allowed certain offsets, and other regulatory matters.
Take a deep breath. You can do this. You can subsist this dreaded tax audit. This short tax audit survival guide will help you along the way.
1. Read your ATO notice carefully and call to follow up: You want to be sure that you understand the timeframe as well as the specific scope of the audit. Are they looking into your entire return or a specific line item? This is important because it can slow the process down if you respond with the wrong information.
2. Disclose ALL details: In many cases, your voluntary disclosure can be helpful during an audit. Be honest and open as the ATO conducts their investigation. If you admit a mistake on your own, the penalties are likely to get reduced.
3. Keep your records organized and easily accessible: you are less likely to run into trouble if you have scanned and uploaded relevant receipts. Over time, the ink on your paper receipts may fade and those purchases may be challenging to track down. Your invoices and other records should be categorized by either date or reason for purchase or both. Hiring a professional may be in your best interest if you do not have a decent record keeping system in place.
4. Review your documents with a professional: Even if you had/have no intentions of improperly lodging your taxes, we all still make mistakes. Hiring a professional to help with the documentation review process can save you lots of time and money in the long run.
And there you have it. Once you have successfully survived the audit, keep records of the ATO’s conclusion regarding your audit. In rare cases, there may be a reassessment. If this happens, it may be a good idea to appeal. You can book a free consultation today with National Accounts. Our tax services can help you navigate the tax return process so that you can survive your tax audit.