Back in June, the Australian Tax Office told a Parliamentary standing committee on tax and revenue that it was “considering” reintroducing random audits. Now the ATO has confirmed random audits will commence in 2016. The compliance program targeting 600 individuals and small businesses will focus on tax evasion and underreporting.
The stimulus for the reinvigorated approach appears to be advice from the ATO’s counterparts in Britain and the US noting that they could not truly estimate the level of non-compliance and tax evasion without random audits.
The ATO advised Fairfax that only a handful of the 600 individuals and businesses targeted will be physically audited where they found grounds to investigate further.
On a more positive note, 500,000 taxpayers have been contacted by the ATO advising that their tax returns will not be subject to further review. The pilot project is aimed at taxpayers with ‘straightforward’ affairs and taxable incomes of less than $180,000. The ‘certainty letter’ is an assurance that the ATO will not review the return unless there is evidence of fraud or deliberate avoidance.
*The above article has been republished with permission from “The Knowledge Shop”.