Tax audits are an in-depth examination to verify the accuracy of the information reported to the Australian Tax Office (ATO) or other Authority. Each year, the ATO continues to announce increases in their audit activity as they target “dodgy” and inconsistent claims. Earnings from cryptocurrencies, ride-share apps and work-related expenses such as fuel and dry cleaning will be closely analyzed, as well as investment property deduction as the ATO moves to clarify returns that don’t quite add up.
Whether you are a business or an individual, there are a number of reasons that could trigger an audit from the ATO. These include:
Not declaring capital gains on property or shares
Undeclared foreign income
Undeclared interest earnt on bank accounts
Undeclared earnings from your small business
Claiming for deductions you’re not entitled to
Having a lifestyle that does not match your income
Claiming for deductions related to rental properties, without proof of rent
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Hundreds of thousands of Australians received letters from the ATO in 2018 that were flagged as unusual or were discovered to have undeclared income, and it is expected that this number will climb again in 2019.