Tax Returns

It’s tax time again.  The August rush has again started with many mums and dads already lodging their annual tax returns in order to get the eagerly awaited tax refunds.

Like last year we are seeing the many clients returning to the firm after trying E-tax.  Most are noticing that they have received smaller tax refunds, delays in receiving their refund and in some instances returning to the firm after being audited by the ATO.

We have two main concerns with the E-tax system, these are:

1. The ATO are aware that individuals are not fully versed in the legislation and therefore many deduction and rebates are missed or incorrectly calculated.  This usually means greater revenue for the ATO and a smaller refund for the individual.
2. Our second concern is that due to the fact that our tax system is a self assessment system.  Many people using E-tax or personally lodging tax returns are unaware that they maybe lodging incorrect returns, this may take place for many years prior to being audited by the ATO.  If this is the case the ATO can go back an indefinite period of time and not only apply outstanding taxes, but also penalties and interest.  This can be a massive burden and recently we have seen the ATO instructing various banks to debit accounts on their behalf. 

Many people think that the ATO can only go back 2 or 5 years years, however this is not the case and they can in affect go back as long as the error has been occurring.

This year we have already noticed that the ATO is far more aggressive then previous years.