ATO crackdown on 'new' wealthy
With the Australian Taxation Office's (ATO’s) 2009-10 compliance program reducing the level at which an individual is considered wealthy from $30m in net assets down to $5m, many more people are at risk of an ATO risk review or audit, according to accounting firm HLB Mann Judd.
Peter Bembrick, a tax partner with HLB Mann Judd Sydney, said likely triggers for such an audit include unexplained tax losses, a lifestyle not supported by apparent after-tax income, treating private assets as business assets or transactions involving low-tax countries or tax havens.
Business owners who had a personal tax performance substantially different from their business performance were also at risk, he said.
It was important to consult with an accountant before responding to an ATO preliminary risk review, because if the ATO is satisfied by the information they receive at this stage a full risk review or audit can be avoided, he said.
The ATO is targeting a number of areas for all taxpayers, including offshore earnings and employee share schemes. The ATO has also extended its offshore voluntary disclosure initiative until June 30 2010, which allows taxpayers to report offshore activities or income with reduced shortfall penalties and possibly receive a reduction in interest penalties, he said.
“The ATO has increased its audit activities in this area and is working closely with AUSTRAC, banks and other overseas tax jurisdictions to trace the flow of funds around the world,” Bembrick said.
“For employee shares or options acquired on and after July 1 2009, it is particularly important that remuneration benefits are checked with your tax adviser to ensure these are disclosed correctly in light of the 2009 Federal Budget changes,” he said.
AUTHOR
Mike Taylor
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