The tax auditing process can seem to be wildly complicated and daunting. Things may seem even more difficult if you end up needing to dispute results. However, you can set yourself up for a straightforward and successful process by gaining an understanding of how the ATO audit process and disputes operate, and adopting a strategy based on this.

The Audit Process

The ATO’s objective when conducting audits is to ensure that you are complying with Australian tax law. It is therefore a primarily investigative process involving intensive case examinations.

The ATO’s approach is deducing whether you are honest and trustworthy in running your small business. They may ask you questions they already know the answers to, just to verify the accuracy of the information you provide them with. The information they require will vary depending on the scope of the audit and what their unique concerns are, which should be specified during the initial meeting.

Audit Strategy Tips

Avoid giving them a dump of information. Focus on giving them only what is relevant and act genuinely during the investigation process. This will help assure them that you are reliable. 

Avoid making claims unless you are sure that it is accurate. Avoid guessing. Since part of their role is to ascertain whether the information you originally provided them with is accurate, the ATO will test later provided information against earlier provided information.

Keep your calm. If you have given them relevant accurate information, there is no need to feel under pressure during their testing procedures. 

Do not rush them. This could frustrate the process. Allow them to move through their procedure at their own pace. Audits can take a couple of years to complete.

Review your material and understand your position. Since the material is likely to be dense, it is important to make sure it is ordered and accurate. Look out for mistakes and if you find any, make sure to notify the ATO.

The Dispute Process 

If you disagree with a tax audit result, there are multiple possible stages to pursue. The first two are internal with the ATO, and the second two are external statutory procedures outlined in Part IVC of the Tax Administration Act 1953 (Cth).

Stage 1: In-house facilitation. This is the first possible stage of a dispute. After processing your request form, an impartial professionally trained facilitator will meet with you and the auditing team. Their aim will be to identify issues, develop options and attempt to reach a resolution.

Stage 2: Independent Review. Small businesses with a turnover less than $10 million are eligible to request an independent review for a number of tax types including income tax and GST. 

You will need to specify the areas of disagreement. An officer who has not had any prior involvement in your audit will then review all the material and hold a case conference with the audit team. At this case conference, information that was previously provided will be considered. Following this, the reviewer will come to an outcome and prepare written recommendations on each issue in dispute which the audit team will incorporate in the final decision. 

Stage 3: Objection. If you are unhappy with the previous outcome, the next stage would be to lodge an objection. Section 14ZU sets out the requirements. The form must be completed in writing, specifying arguments against the ATO’s finding. It also needs to be within the prescribed period. The Commissioner of Tax will then decide whether to partly allow it, wholly allow it, or disallow it. 

Stage 4: Administrative Appeals Tribunal or Federal Court. If you remain unsatisfied, you can appeal it to either the AAT or the federal court. Generally, at this stage, you will be limited to the grounds you have previously stated. However, your objection will not be read narrowly (Re Confidential and Commissioner of Taxation (2012) 56 AAR 273) and you may seek approval to alter your existing grounds of objection (Gilder v FCT (1991) 22 ATR 872). If you are disputing an assessment, you will need to show that it is inaccurate by showing what it should have been. If you are disputing a decision, you will need to show that it should not have been made, possibly in favour of an alternative. 

By understanding the process and adopting the mentioned strategies early in the process, you will give yourself the best chance of having a successful outcome. The multiple dispute stages can help you achieve a satisfying result, but it is advisable to start off on the right track to minimise uncertainty and costs. 

If you are from outside of Australia and running a website or otherwise sending goods to Australia, you might need to pay Goods and Services Tax (GST).

In the last couple of years (from 1 July 2018) the Australian Government changed the law so that goods worth less than $1000 that are sent to Australia are subject to GST. Since that time, the Australian Taxation Office (ATO) has been sending letters to many websites telling them that they need to pay. A lot of the time the people receiving these letters think that it is spam or a scam of some sort. It isn’t.

Unfortunately, the Australian Government got a bit lazy and decided to impose the tax on the website owner, even if the website owner isn’t the actual seller. Its easier to charge the person collecting the payments than try to collect from each individual seller, which would be a real hassle. Many website owners don’t actually make enough money to cover the GST, which is calculated at 1/11th of the gross payment received.

This means if, on your website, a seller sells a good for $110, you are liable to pay $10 in GST. You might not even recover this in the fees you charge your sellers.

The law is relatively new, so the ATO is taking the approach that everyone just needs to pay it. Time will tell how it pans out in practice.

If you have been contacted by the ATO and want to work out whether you need to pay, or if you want to make sure you are set up correctly so you don’t need to pay (or are covered if you do) then please contact us and we will help you.

Our number is + 61 2 7200 8200 or email me personally at adam@adamahmed.com.au

The ATO has been setting their own policy on the cash flow boost which is different to the law. When the rubber hits the road, the Courts will apply the law instead of the ATO policy (which is not the law). There is hope if you think that you qualify but the ATO policy says otherwise.

We would be happy to help you, feel free to call us on 02 7200 8200 or email at adam@adamahmed.com.au

We also have a template available for you to download if you’d like to have a go yourself.

We’re starting to see people being asked to pay back the Jobkeeper or cash flow boost they received. Often this is after they’ve spent the money, and its putting them in a real bind. But you may not have to, because the ATO is getting the law wrong a lot (because its new, there are some administrative problems with the rollout).

We would be happy to help you, feel free to call us on 02 7200 8200 or email at adam@adamahmed.com.au

We also have a template available for you to download if you’d like to have a go yourself.

A lot of people have had trouble getting their cash flow boost. When they finally do, the ATO sometimes changes its mind and asks them to pay it back. Its happening now.

Here is a video on what you can do if the ATO wants you to pay the cash flow boost back.

We have a template available if you need to object to an ATO decision to deny the cash flow boost https://knowthelaw.com.au/product/cash-flow-boost-review-or-objection-template/

Feel free to contact us: 02 7200 8200

Has a neighbour approached you with a request that you agree to grant an easement, perhaps to run drainage through or drive over, over your land? If so, it is essential that know what your rights are, now and into the future.

Your $$$$$$ compensation

In most instances, you have right to be compensated for an easement imposed over your land. The compensation amount is usually either agreed with party requesting the easement or ordered by the Court. The amount will vary depending on several things which may include the needs of the party requesting the easement, the amount of an expert’s valuation of the impact of the easement, the nature of the easement granted and your or your solicitor’s negotiation skills.

Your right to compensation is reflected by section 88K (4) of the Conveyancing Act 1919 which provides that if the Court makes an order imposing an easement over land that it also provide in the order an amount for compensation to the land owner unless there may be special circumstances.

Your legal costs paid

It is very important to seek legal advice regarding a potential easement over your land and ensure your rights are properly protected during the process to agree to grant the easement, the construction of the easement and into the future.

It is common practice for developers (or people requesting the easement) to agree to pay your legal fees.  We have a template below to request this.

If you agree to grant the easement without the need for Court proceedings, we recommend you enter into a Deed with the neighbour that includes a provision that all your legal costs of and associated with the granting of the easement are paid by the neighbour. This ensures your neighbour pays your legal costs and you are not out of pocket.

If the dispute ends up in Court, perhaps because the amount of compensation cannot be agreed or the neighbour has not been reasonable, section 88K (5) of the Conveyancing Act 1919 provides that the costs of the proceedings are payable by the applicant, subject to any order of the Court to the contrary.

Ongoing maintenance of the easement

Many easements require ongoing maintenance either on a regular basis, or perhaps in 10 years when the piping under the ground may need fixing. Provision for ongoing maintenance is best included in the Transfer Granting Easement, which is the document that provides permission from a land owner for an easement to be created over their land.

We recommend you enter into a Deed with the neighbour which includes a provision that ensures either the current owner or future owners of the land benefited by the easement keep the easement in good repair and working order. This type of provision may save you many thousands of dollars down the track.

Protection from any liability

There will often be construction works associated with the easement and it is important you are protected should there be an accident such as a person being hit by a falling fence or a child falling into a hole on your land.

We recommend you enter into a Deed with the neighbour which includes a provision that ensures you are indemnified against any liability, loss, claim or proceeding arising out of the construction works associated with the easement.

What to do next?

No matter at what stage of the granting an easement process you may be, you will benefit from obtaining legal advice to assist you in achieving the maximum amount of compensation payable and ensuring your rights are properly protected now and into the future.

Feel free to ask us any question you may have and we look forward to helping you – 02 7200 8200 or adam@adam-ahmed-8613

Top tax lawyer gives 3 tips on what to do if your cash flow boost has been refused or isn’t coming through:

Hope this video helps. Best of luck!

Contact number is 02 7200 8200 and email is adam@adamahmed.com.au if you need it

The Government recently introduced the cash flow boost for pretty much everyone who has employees.

A lot of people got it, but some people missed out for various reasons, usually a technicality of some sort or just a processing delay. What is interesting is the ATO doesn’t seem to be applying the law correctly. Many people meet the requirements of the legislation, but the ATO refuses to pay them.

Are you one of these people?

Its tough to see other competing businesses get the money when you don’t, especially when you need it too. Especially when you have done the right thing, are hiring staff and helping keep the economy afloat.

Fortunately (or unforutnately) this is a common problem.

Step 1 – identify the REAL problem

For example a common one is that you didn’t have PAYG registration before 12 March 2020. This is not actually a requirement of the law and the ATO has acknowledged as much on their website. When the ATO is asking you for information about paying employees before 12 March 2020, what they are really asking you is if you have tried to fraudulently claim the cash flow boost. Its a different question, but its important, because you can’t answer the REAL question if you don’t know what it is.

Step 2 – Talk to a person

The ATO is completely overwhelmed by calls and new legislative changes right now. They are building automated processes which allow a quick burn and churn. Whilst that will help most people, it won’t help you if you have a unique situation. The person with a chun and burn mentality cannot look into or understand the nuance. You need to try to talk to someone. Impossible? Not really, there are a lot of administrative maneouvers you can try and that will work. Find out what these are and use them.

Step 3 – Hold your ground

If you qualify, you need to be paid. There isn’t much more to it. Make sure you go through the requirements of the LAW (not just the ATO website). If you meet the requirements, then you are entitled to be paid.

The phone of the firm in the video is 02 7200 8200 or email adam@adamahmed.com.au

I

We have prepared a template for cash flow boost, a template for jobkeeper (employee) and jobkeeper (eligible business participant) to help you go through the requirements of the law and identify whether you are eligible. It comes with a free 15 minute consultation with a tax expert if you need it. Best of luck, we hope you can get your boost.

If you came here just to get a template or sample tax objection form to use – click here.

If you are interested in learning more about the process and how to do an objection, please read on.

If the ATO has made a decision you are unhappy with, you may have the right to object.  It will generally tell you so on the letter.

If you are planning to object, here are some tips I’ve picked up over the years:

1.  Get the facts

Read their decision again and underline the factual points they make that are wrong and make a note of these.  The facts are the easiest points to prove are wrong.  For example, they might say you were working 5 days a week when in fact you only work 3 days.  Keep a list of these facts.

2.  Consider the implications of these facts

Think about the tax outcome from the facts being incorrect.  For example, if they say you made sales you didn’t, then obviously that will mean you have a lower tax bill.  However, if they say you made less sales than you actually did, then you will essentially be saying they under-taxed you.  Think through the ramifications of the facts that are wrong.

Also consider their relevance.  Sometimes bringing up errors that are inconsequential can hurt your case because the objection officer will quickly form the view that, whilst there may have been factual errors, none of them affect the outcome.  List the facts in order of relevance to the outcome.  If you have a list of other grievances you want to raise, feel free to raise those but do so in the end and make sure you set out a reason for doing so – for example, you may say the auditor did not take the time to consider all the facts which is demonstrated by the behavior you are raising.  Keep it relevant.

3. Remember how you got here & remember your audience

Its easy to blame the auditor (or the original decision maker) as a bad egg and that they didn’t understand you, just got it wrong or perhaps they were a terrible person. 

Whilst there might be merit in this view, at the end of the day you are still dealing with the same organization – the ATO.  The objections officer will be inclined to side with the auditor who is from the same organization rather than you.  Its nothing personal against you, its just they don’t know you at all so will be more inclined to follow the viewpoint of one of their colleagues than yours.

As such, think about what it was specifically that occurred during the audit process or de-railed the original decision and make sure that doesn’t happen again.

4. Consider your strategy

You won’t know initially where this is going to end up.  If you are unhappy with the objection officer’s decision you will need to go to Court or the Tribunal.  Ideally you should set it up for a Tribunal hearing because that will put pressure on the objections officer to consider the matter more carefully.

The best way to do this is to have an overall strategy.  The objective of the strategy is to get the outcome you want, whether it is a lower tax bill or overturning an unfavourable decision.  Think about what the elements are that are necessary to achieve this strategy. 

Don’t make it easy for them to reject you.

5. Include all your grounds

As a technical rule you need to include all the grounds of your objection.  To do this you will need to identify the key issues that make up your argument.

Steps 1 – 4 should help you do this. 

This website does have a tax objection template you can use which serves as a good example of how to set out an objection. 

Alternatively, we would be happy to help or discuss with you if you would like.  Please feel free to call me on my direct line 02 7200 8201 or email me personally at adam@adamahmed.com.au

We all, in a particular context, at times use words and phrases about which we are sure there is a clear and unambiguous meaning, and it can come as a surprise when another person provides a different meaning for those same words and phrases in the same context. The Courts are often asked to interpret […]