A lot of people are concerned when they have been informed by the ATO that they are being audited. It is important to review your operations and for an external accountant to review your accounts to ensure that any disclosures you make to the ATO are full and frank. This can go a long way towards reducing any potential penalties, interest and criminal penalties than can apply.
Having worked on a number of matters for clients and representing those clients at senior levels within the ATO we frequently find areas that have been treated incorrectly. These include :
• loans having been made to related entities or related parties without taking into Division 7A or calculating the interest and minimum repayments on those loans incorrectly.
• Offshore income not having been accounted for correctly or not at all.
• No consideration given for any potential foreign exchange gains or losses on maturing term deposits in foreign currencies.
• No consideration given for the application of the TOFA rules for converting foreign currencies into Australian dollars.
• Incorrectly calculating GST when applying the margin scheme to properties being sold.
• Incorrectly calculating CGT (Capital Gains Tax) on disposal of an asset. We frequently find errors including
o no consideration being given for the reduction of the cost base for capital allowances having been claimed during the life of the asset;
o incorrectly claiming the capital gains tax discount for companies that hold investment assets;
o incorrect application of the small business concessions. In particular not considering the impact for extracting funds from a company following the application of the small business CGT concessions.
o understating the cost base resulting in a higher capital gain and the taxpayer paying higher taxes on the resulting capital gain.
o not carrying forward prior year capital loss resulting in a higher capital gain and the taxpayer paying higher taxes on the resulting capital gain.
These are just a sample of the many issues we at Omega Partners confront every day dealing with representing clients with voluntary disclosures and tax audits.
If you have been approached by the ATO or are concerned about your tax affairs please give us a call at Omega Partners to confidentiality discuss your matter and see how we may be able to assist you.
Call Omega Partners on(02) 8211 0429 today.