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16 Sep 11 On GST audits

MEMBER 173 writes:

"The ATO recently completed a GST audit of one of our clients. The audit took 3 years and the ATO changed audit staff during that time so were unable to complete the audit as planned and granted themselves an extension (wouldn't that be nice for all of us).

The initial auditors were very militant, not nice to say the least. The initial finding levied almost $800,000 in GST plus penalties for recklessness even though the client had professional advice from specialists each step of the way. The initial total just under $1m, GIC accumulated during the audit and the ATO constantly chased collection even though objection process was underway. The client appointed specialist tax lawyers to object, 2 years later the matter was finalised with GST owing of $20k.

Meanwhile, client out of pocket more than $50k in legal fees simply because the ATO cannot interpret their own legislation.

No offer of compensation from the ATO for the costs involved and 3 years of stress, not to mention the impact on our practice and me personally during this time.

It's dangerous the level of 'expertise' within the ATO when you have cases like this. I am not sure why they can act like this with no recourse for their actions."