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When the tax collector puts your statement under the microscope, you have to give him everything, even the number of your local Pizza Hut.
For the Tasmanian aeronautical engineer Ben, being audited two years in a row for the same claims was "a bit like intimidation". Both audits were released, but his tax refund was delayed by two months.
The 32-year-old, who asked not to use his last name, earns about $ 200,000 a year and makes significant work-related deductions for vocational training courses and mobile phone bills, as well as for claims relating to investment property.
"I was audited last year and the year before," he said.
"Basically, I've had a lot of training the (first) year, a lot of expenses and just investments. It was above normal, the deductions were much higher than in previous years, but that's because I took a training course in aeronautical engineering in Brisbane. I left for about nine weeks.
After filing his income tax return through an accountant, he was waiting for his return within seven days, but his accountants were sued four weeks later with the ATO "they said they would control me ". "The communication was pretty bad," he said.
At first, the ATO "only wanted to have more explanation on some of the claims," which his accountants sent on his behalf. "Then they started to be really nervous," he said.
"As a trader, I have a phone, I claim about 30%. They wanted all my phone bills, my Telstra bills. I had to go through and affix a label next to each number, I had to write who they were – that's the job, which is personal, Pizza Hut. "
He also had to hand over all receipts from his training course. "Food, fuel, all that stuff," he said. "I've had hundreds of receipts. With the property (deductions), they just asked for more explanations. "
The first year's audit went smoothly, but "it probably took seven or eight weeks." "It was a huge pain, I had a credit card bill that I was trying to pay," he said.
Then last year it happened again. His return was delayed and the ATO informed him again of his audit, asking him almost the same questions, except that he did not ask questions on my phone.
His accountants asked him why he was audited for the second year in a row. "My ATO case manager did not even know I had been audited the previous year," he said.
"Everyone understands that the system must be honest, but in my case, I thought I had all the receipts. My claims were all legitimate. Everything has been approved. Doing the same job twice in a row was intrusive, a bit like intimidation.
Ben, who describes the experience as "quite stressful," says his biggest advice is to go through a tax officer. "They really made things less stressful," he said, adding that he had not yet made the comeback this year. "But fingers crossed," he will not be three in a row.
H & R Block's director of tax communications, Mark Chapman, said that while large-scale audits where the ATO was scrutinizing everything with a "fine-tooth comb" were typically reserved for people with complex tax affairs, the ATO also dedicated "a lot of resources to target ordinary taxpayers".
"Especially with regard to work-related expenses, the ATO is really looking very closely at these requests, in some cases very small requests for things like laundry," he said.
In recent years, the ATO has significantly increased its individual, work-related, work-related claims, which account for the largest portion of the $ 8.7 billion tax gap.
Mr. Chapman stated that if taxpayers received a letter of explanation "please explain" and were not already represented by a tax officer, they should immediately find one.
"If you filed the statement yourself and you get one of these audit interactions, you should seek a professional," he said. "Do not try to manage it yourself, it is very easy to make the situation worse by doing or saying the wrong thing or ignoring the letters."
The most important thing was to "respond promptly and give them what they ask for," he said, adding that "unfortunately, it is quite normal for the ATO to request detailed information, as in Ben's example with his phone bill.
"Many questions asked by the ATO are quite detailed," he said. "You could, if you wish, see some of these issues as somewhat invasive, but the ATO at the end of the day has the power to ask them. You do not really have the power to push back, the best thing to do is suck and respond.
An ATO spokesperson stated that all personal tax returns were "automatically badessed on a risk basis". "In case of significant risk, or if an error or omission is identified, the return is stopped and the return adjusted to prevent an incorrect refund being paid to a customer and may result in future debt," she said.
"For example, when third party data reported to the ATO do not match those reported in the return, we will correct the return before issuing the refund to the customer."
She stated that since July 1 of this year, the ATO had already adjusted more than 52,000 tax returns due to simple errors and omissions.
"In addition to these adjustments made before repayments are made, our audit program continues throughout the year, which means that even though we can not review all claims in detail at the time of the audit. tax, we identify them then review the claims made and ask for justifications, if any, "she said.
"Our strategies are focused on claims that seem high, for example, compared to other people in the same occupation who have the same income. For taxpayers who have a legitimate claim, the best approach is to make sure to keep records to support their claim. "
She added, "The myDeductions tool in the ATO app makes it easy to store a photo of receipts so it's easy to keep it handy when needed."
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