Tax Audits

What an ATO audit or review involves

It can range from a please-explain letter about a single deduction to a full multi-year review of your affairs. What you say, and how you document it, matters – over-explaining, sending the wrong thing, or answering in a rush can turn a simple query into a bigger one. We handle the correspondence and represent you, so you’re not facing the ATO alone or volunteering something you didn’t need to.

The forms ATO contact takes

Not every ATO letter is an audit, and the right response depends on which kind you’ve received:

• A data-matching letter – the ATO has information (from a bank, employer, exchange or another agency) that doesn’t match your return, and wants it explained
• A review – a closer look at particular items or a year, often resolved with the right information
• An audit – a formal, deeper examination, sometimes across several years

Each is handled differently. The mistake we most often see is people treating a routine data-matching letter like a crisis, or an audit like a routine letter.

What to do when a letter arrives

Don’t reply in a hurry, and don’t ignore it. Send it to us first. Often the right, measured early response closes the matter down before it grows – and if it is going to be more involved, the worst thing is an off-the-cuff answer that you can’t later walk back. We’ll work out what’s actually being asked, gather what’s genuinely needed, and respond on your behalf.

The best defence is a clean return

Most audits trace back to something avoidable – an unsubstantiated deduction, income that didn’t match the ATO’s data, a return rushed at the last minute. Getting it right the first time, with proper records behind it, is the cheapest insurance there is – and it’s most of what we do. For added peace of mind, audit insurance can cover the professional fees of responding if the ATO does come knocking.

Common questions

The ATO sent me a letter – what do I do?

Don’t reply in a hurry. Send it to us first; the right early response often closes it down.

What is audit insurance?

Cover for the professional fees of responding to an ATO audit or review – worth having if your affairs are involved.

Will being audited mean a penalty?

Not necessarily – many reviews end with no change. Penalties usually apply where something was wrong and undocumented.

What’s a data-matching letter?

The ATO has data that doesn’t match your return and wants it explained – often routine, and we handle the response.

Can you deal with the ATO for me?

Yes – as your tax agent we handle the correspondence and represent you throughout.