Tax audits are conducted when the ATO deems that a more extensive examination of an issue is necessary. These audits can be conducted on a fairly basic level, or they can be much more in-depth and analytical.
In most cases, a review will lead to an audit, but this isn’t always necessary. A review may not be deemed necessary in cases where fraud or evasion is suspected or a high risk associated with the transaction.
The ATO will be transparent about the following aspects of an Audit:
Cooperating with the ATO’s requests is the ideal response. If there is a lack of cooperation, then the ATO can use their formal powers to access the information they are seeking:
Cooperation makes this process much easier for both parties as a lack of cooperation can not only create a bad image but can be easily overcome by the ATO’s powers.
If the ATO orders an audit, you can come to us for advice on what else you can do. As your tax adviser, we are in a position to assist you with understanding the ATO’s needs.