Connection between changing accountant & audit

Is there any connection (in ATO's eyes), when we change our accountants and got audited? I have 3 stories about this:
1. My uncle change his accountant and then he got audited the year after.
2. Myself, I change my accountant and also got audited the year after.
3. My friend also change his accountant last year and got audited.

It made me paranoid to change accountant now. Is that real or just a myth?
Thanks.

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oh no really?!?!

Can someone more write about this from your experience? I was just thinking to change my accountant next year maybe....

Is it my responsibility to remind my accountant to include interest rates on IP, depreciation, then capital works deductions even he is doing my return for 10 years and i have that IP for almost that long??
 
Is there any connection (in ATO's eyes), when we change our accountants and got audited? I have 3 stories about this:
1. My uncle change his accountant and then he got audited the year after.
2. Myself, I change my accountant and also got audited the year after.
3. My friend also change his accountant last year and got audited.

It made me paranoid to change accountant now. Is that real or just a myth?
Thanks.

--

Take a couple of aspirins and lie down fellow investor.

The ATO are pretty much transperant. Heck they even tell you via the media what they are going to do eg pick on teachers or carpenters etc

The ATO knows which industries are making the biggest boo boos or fraud. They know were the money is and use risk management techniques. (Having said that the cash economy is worth billion of $ pa and yet they can't stop it - tells you something)

If they were basing an audit on the fact that a taxpayer changed accountant then I'm sure it would be out in the media. Seems like a waste of resources IMO. Unless perhaps the ATO knows that certain accountants are overclaiming deductions.

Rest easy.
 
oh no really?!?!

Can someone more write about this from your experience? I was just thinking to change my accountant next year maybe....

Is it my responsibility to remind my accountant to include interest rates on IP, depreciation, then capital works deductions even he is doing my return for 10 years and i have that IP for almost that long??

First Accountant we had was for over 20 years then he retired and married an Asian Lady,the 2nd,Accountant Brisbane based we found through this site in 2011 and I did have some Tax problems at the time the Gentleman went the extra mile helped us out of the problem and we have never been
Audited so only from our experience I would say no just don't add any extra worry to your life..imho..

http://www.youtube.com/watch?v=evJ3stz9KU0&feature=related
 
Perhaps the new accountant picked up something you were not claiming properly and the figures changed on what you were claiming.

Anyway, nothing to worry about, unless you are claiming things not entitled to or hiding income.
 
I've changed accountants a few times now as a result of my job, and I'm yet to be audited. It's a coincidence. It may be something that the new accountant was claiming that the old one didn't that set off their sensors. For instance, one of my accounting lecturers used to work for the ATO, and he said they often looked for claims just short of a limit... they'd done the maths, and worked out that people who claimed the max often had in excess but couldn't be bothered, whilst fraudsters figured by not doing so they'd get max benefit with least risk.
 
Heard on the radio last week ATO has property investors on their 'hit list' for the year.

They normally target a particular group of professions each year.

This may be why the others are targetted for audit - assuming they are also property investors, of course.
 
Perhaps the new accountant picked up something you were not claiming properly and the figures changed on what you were claiming.

Anyway, nothing to worry about, unless you are claiming things not entitled to or hiding income.

Agree Terry, they use data analytics to decide a variances which may be outside tolerance. They will usually call you and ask, but as Terry said, you should not have anything to worry about.

Cheers, Ivan
 
What if you are contacted by the ATO for an audit and you say that you will only produce records if you are served with a notice under Section 264. I don't think they will go to the trouble of issuing such notice on a small taxpayer.
 
What if you are contacted by the ATO for an audit and you say that you will only produce records if you are served with a notice under Section 264. I don't think they will go to the trouble of issuing such notice on a small taxpayer.

LOL. Thats like staring down the barrel of Harry Callahan's .44 magnum and declaring 'I feel lucky'.
 
What if you are contacted by the ATO for an audit and you say that you will only produce records if you are served with a notice under Section 264. I don't think they will go to the trouble of issuing such notice on a small taxpayer.

Rubbish. Issuing a notice is the Commissioners easiest fishing trip. s264 is less likely than a s353-10 notice. A 353 Notice requires "information". Often vague and very broad in reference. Its highly unlikely a 264 or 353 notice would be issued for a prop investor and their tax return unless preliminary audit indicates a sham arrangement or a scheme. A 264 notice would be issued to the agent, the trust deed provider, the bank maybe. 264's are better used for factual information to use against a taxpayer or to gather industry intelligence. They would just ask the taxpayer for substantiation evidence for the deductions claimed and details of the contract and rental tenancy such as agent stmts etc.

I say ask - They would request it by phone initially. If you ask for a notice they will issue it. As a tax agent I always insist on a notice. That way their request is explicit and I can comply with an explicit list. Otherwise later they may argue I didn't comply with a request. Penalties can be increased etc Its normal process and they know I'm not being difficult and I tell them in nice polite terms. I just want a notice so my client knows what they want, when etc . Happy to help yada yada.

I wouldn't be defiant and demand a notice "or I wont assist"....That's asking for trouble.

My advice is if the ATO call and indicate that they are conducting some preliminary enquiries is to ask what they require. Tell them you want to have their tax agent call. Its never going to be described as an audit at this point. Then get a good tax agent to make the call for you. We handle these enquiries all the time... In many cases their motive can be very different from what you suspect.
 
Paul, I don't think they issue a S264 notice to conduct an audit, except on rare occasions.

If they ask for records (in the absence of a 264) and you refuse, what are they going to do? Knock out your deductions? If they do, lodge an objection with copies of your receipts. End of story.

Of course if there are errors in the return, then one may cop a higher penalty. Just make sure your return is squeeky clean!
 
Paul, I don't think they issue a S264 notice to conduct an audit, except on rare occasions.

If they ask for records (in the absence of a 264) and you refuse, what are they going to do? Knock out your deductions? If they do, lodge an objection with copies of your receipts. End of story.

Of course if there are errors in the return, then one may cop a higher penalty. Just make sure your return is squeeky clean!

The accountant, bank manager and adviser will all ask the ATO to serve a s.264 notice on them personally.

That way the client cannot sue them for breach of contract by divulging sensitive client information.
 
I didn't draw a connection between an audit and a s264 notice. An audit only happens when its called an audit. The ATO will tell you if its an audit. Most ATO enquiries are pre-audit activities. Datto's response is something that can trigger an audit out of a simple enquiry.

A s264 notice is ONE of the Commissioners tools to gather information. It can be about an industry, a taxpayer and a broader exercise to gather information on participants to a practice or a scheme. Its unusual for it to be used for a single taxpayer. Its usual for it to be used for gathering information and evidence from others. As Rob agrees most third parties will require possession of that notice to comply with privacy etc laws. I would be more concerned with a s353-10 notice (s353 of Schedule 1 of the Tax Administration Act). They are after something when one of those is used.

My reply was in respect of Datto's view of telling ATO to jump if they ask for substantiation information. Datto you are correct they will deny the deductions and yes you could object. However as a taxpayer you really don't want to take that aggressive approach with the ATO. You don't need to. You dont want to. You are likely to **** off the person who could trigger a higher level review for the sake of producing the receipts requested. That's like telling a cop to go stuff himself and write you a ticket. He will... Possibly more than one. He could defect the car.

The ATO response may be to conduct an intensive review of ALL deductions for say two years. Or broaden their enquiries and ask things of your employer or review entities associated. Finding trivial issues you haven't complied with. They will find things. It will chew up your time and be a nuisance. Your refund will be delayed. Penalties etc...They may find you were reckless etc....

For those not quite on the up with the English language my response was about the tone you convey in dealing with those who work at the ATO. They are doing their job and have exceptional powers IF they need them. Don't give them a reason. Be polite, be helpful and be very sparing with words you say.

The professional advisers out there all know what I mean when I say its wise to say very little but what you do say needs to be co-operative. In true audit situations then my advice is to have legal representation.
 
Sections 353-10 & 353-15 relate to information gathering powers for indirect taxes, i.e. GST, FBT, etc.

They mirror the income tax administration powers to a large extent.

As Paul says, once a taxpayer has given the ATO case officer cause to escalate the response then it is VERY hard to stop.
 
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