A timely warning....

[DaleGG]

Hi

This has been a very interesting week! On Wednesday afternnon I spent 5 hours with a very helpful and friendly fellow from the tax office and amongst other things, we discussed what THEY are up to.....

You may have seen an article in the Fin Review a couple of weeks ago now which talked about how much money the tax office have spent on talented people in mathematics and in software development to show trends that the ordinary person might not see. A kind of early warning system, if you will.

The bottom line is that the tax office are planning on being a lot more aggressive in their approach to audits this year of:

Work related expenses
Rental properties
CGT

The fellow I talked with mentioned that in a full blown audit the tax office will take your mobile phone bills and using a reverse white pages, identify who you have rung and whether the call was work related or private. For most occupations the audited results have been less than 45% work related and the average is 22%. Therefore, be prepared for a challenge if you are audited and the mobile percentage for work use is very high.

The tax office would like at least one month identified by highlighting the work related calls on a statement showing all calls made.

They expect that interent and email use will account for 30% to 40% of all use for employees and from 40% to 50% for business people.

They would like a diary kept of all on line use over a month identifying work related use and private use to prove the claims.

The list goes on.....

So, this year when you are putting together your tax returns be prepared to prove all claims made and this will include the percentages of work related use that you believe is appropriate.

I thought I would share the joy!

Have fun

Dale

 

[Ronulas]

Hi Dale,

I have heard good things about your work and was wondering if you have any problems doing interstate tax refunds. I am a bit of a face to face sort of guy but to get someone who knows what there doing in property would be a relief. Every time I get a fly by nighter I allways feel like I'm getting ripped off or missing out on a return. I'm a Defence member who lives SA and have 2 IP's and 1 PPOR.

If this is an inapropriate message asking about your services on forum then I apologise. Please contact me by email if need be. Thanks.

 

[wombat]

Thanks for the update Dale,

....snip

"The fellow I talked with mentioned that in a full blown audit the tax office will take your mobile phone bills and using a reverse white pages, identify who you have rung and whether the call was work related or private. For most occupations the audited results have been less than 45% work related and the average is 22%. Therefore, be prepared for a challenge if you are audited and the mobile percentage for work use is very high."


....snip


I find this stuff intriging! How do our privacy laws actually help us???

wombat

 

[coastymike]

If you read Section 263 and 264 of the ITAA you would be amazed at the powers of the ATO.

The ATO’s main access and information gathering power fall under three
categories, these are:

• the power to gain access to premises and documents;
• the power to require the furnishing of information and attendance through the giving of evidence. Note that this power can only be exercised through the service of a notice; and
• the power to require the production of documents. As with (ii), this power can only be exercised through the operation of a notice.

The right to full and free access is the right to access all buildings and examine all documents relevant to the purposes of the ITAA. These issues have been the subject of detailed discussions in cases such as FCT & Ors v ANZ Banking Group Ltd. In O’Reilly and Ors v Commrs of the State Bank of Victoria and Ors, the High Court of Australia held that full and free access must be without physical obstruction.

Basically if the ATO wants access to your mobile phone records they have the right, if they want to question your employees about your activities they have the right, if they want to enter your home to obtain records and documents they feel are relevant to their purpose they have the right (provided they dont bust down your door) but given the ruling in Ors I would think that they could organise for a professional locksmith to open your front door if you didnt give them access. It is truly Orwelian in my view but alas that is the law.

 

[quoll]

Thanks Dale

I might drop my internet claim to 50% this year, I figure it's better to come in just under the radar than just over it.

cheers
quoll

 

[coastymike]

Dale,

5 hours with the Tax Office. I would have needed a bottle of Lagavulin after that meeting.

 

[Mry]

You need to keep a month diary on anything that could be apportionable. For computers, you apportion hours used. For mobiles and phones, you apportion based on calls.

Another tip is that claiming 100% of something like a mobile phone in an audit situation could lead you to having the claim inspected. Something lesser such as 88.5% or 60% is better since it shows that you took some reasonable care in accounting for the private use of the phone.

If you have no one month diary though, you have no justification for any apportionment you make.

And yes, you may have a right to a higher claim, but you have to weigh up getting a better deduction and possibly doing a tango with an 800 pound gorilla vs paying more tax. Its a sad state of affairs but the reality when you are a small taxpayer.

I found that full blown audits don't happen very often. You typically get a
Please Explain" type audit. Full Blown audits come to people who stone wall the ATO or look like they are really rorting the system. But the ATO always "rattles their sabre" every year so this is just the latest. Last year was home office claims and GST. This year, I believe they will be looking at interest claims (in lieu of the number of cases recently decided on and TRs released), repairs (like they do every year) and GST again.

Next time you do your tax return, read the privacy declaration and you'll see who they share info with.

 

[House_Keeper]

Thanks Dale.

The growing use of technology will make it easier and easier for the ATO to track what people are up to.

 

[keithj]

The growing use of technology will make it easier and easier for the ATO to track what people are up to.

And also co-operation with overseas Tax offices.

I just got a 'please explain' regarding interest I received in an overseas a/c 5 yrs ago.

 

[madmurf]

Internet Claim

Dale

If the internet is charge at a flat monthly rate unlike phone calls or other utilities cant you claim a 100%.


Thanks

Madmurf

 

[grubar30]

I'm with quoll - I'm taking my claims down to the 50% mark for both Internet and Mobile.

 

[Sim]

Dale

If the internet is charge at a flat monthly rate unlike phone calls or other utilities cant you claim a 100%.

I would think more of an "hours used for income producing activities versus hours used for personal use" as the breakdown.

 

[geoffw]

How would hours spent on this forum be accounted for? Is this time business related?

 

[DaleGG]

Hehehe - yes, I did make a mess of a beautiful bottle of Laphroig (sp?) afterwards.....

Dale,

5 hours with the Tax Office. I would have needed a bottle of Lagavulin after that meeting.

 

[DaleGG]

Hi

It also came out that the Federal Police and other agencies like the tax office have access to a variety of information that makes Lance Spicer's paranoia seem most reasonable after all....

It was certainly an eye opener!

Dale

 

[DaleGG]

Hi

The bottom line should be to do as you have always done.....prepared your tax returns believing that the information included is correct and able to be proven under question or investigation. And, don't be greedy

Nothing has changed...except...the microscope just seems a little more powerful and a little more focused than before.

Dale

 

[Sunfish]

Hi

The bottom line should be to do as you have always done.....prepared your tax returns believing that the information included is correct and able to be proven under question or investigation. And, don't be greedy

Nothing has changed...except...the microscope just seems a little more powerful and a little more focused than before.

Dale

Dale. Your first post annoyed me because this is nothing new. Any competent tax account would have known this as fact without wasting five hours with an unplesant gentleman.

I printed your post and showed my wife whose competance, or so it appeared to me, was questioned recently. In her ladylike manner she heaped scorn on me, threw the print-out in the bin and sorta said "I know this! Don't try and tell me my business".

I bit my tongue all day but now you say "The bottom line should be to do as you have always done.....prepared your tax returns believing that the information included is correct and able to be proven under question or investigation. And, don't be greedy". So why the five and a half star post?

It seems to me we are where we started except that you have touted for some business.

Is it acceptable for me to suggest going to the biggest and best accountants in the country, PriceWaterhoueCoopers? They are not property specialists, they have a high degree of knowledge in everything.

 

[Sultan of Swing]

Hi Thommo

I read your last post in the 'Alleged Aussie Drug Dealer' thread and thought hmmm, I wonder????

And after reading your post just before this one, I've now gotta ask.

You been drinkin?? lol

Cheers

 

[Rolf Latham]

Hi Thommo

Dale has enough work I think you will find, many of us contribute simply because we like to do so and give back.

ta

rolf

 

[Jimmyjamjars]

Dale. Your first post annoyed me because this is nothing new. Any competent tax account would have known this as fact without wasting five hours with an unplesant gentleman.

I printed your post and showed my wife whose competance, or so it appeared to me, was questioned recently. In her ladylike manner she heaped scorn on me, threw the print-out in the bin and sorta said "I know this! Don't try and tell me my business".

I bit my tongue all day but now you say "The bottom line should be to do as you have always done.....prepared your tax returns believing that the information included is correct and able to be proven under question or investigation. And, don't be greedy". So why the five and a half star post?

It seems to me we are where we started except that you have touted for some business.

Is it acceptable for me to suggest going to the biggest and best accountants in the country, PriceWaterhoueCoopers? They are not property specialists, they have a high degree of knowledge in everything.

Are you reading the same thread as me ???????????????? I do NOT know what you're reading into Dale's posts but from where I'm sitting, he was merely trying to give people a little warning of what to expect when filing tax returns this year, not "touting for business" as you put it. If you cannot contribute to this forum, but instead, choose to wait for others to post and simply denigrate, then maybe you need to bite your tongue for a bit longer.
JIM