It should come as no surprise to members that with the release of the Inspector-General of Taxation’s review into the ATO's audits of SMEs and high wealth individuals (Click here), the long-held concerns of tax professionals in relation to the ATO’s audit practices have been justified. The Tax Institute’s strong advocacy on behalf of members’ real life concerns contributed to the establishment of the Inspector-General’s review. Albeit two years in the making, the review provides much-needed clarification, particularly for small businesses, regarding the ATO’s audit practices, which this segment of the market has not properly had.
There is no reason for taxpayers to be unfairly treated and subject to unnecessary compliance costs simply because they are undergoing an audit. Consequently, the Inspector-General’s findings centre on improving project management, ATO conduct and communication. Members’ concerns regarding the lack of appropriate resourcing and training of ATO SME officers that carry out audits have also been highlighted in the report and duly recognised by the ATO. Many of the identified deficiencies and proposed solutions accord strongly with improvements advocated for by The Tax Institute throughout the period of the review.
The Tax Institute commends the ATO for agreeing with the vast majority of the Inspector-General’s recommendations and notes that the time it took for this review to be completed has enabled the ATO to already acknowledge these deficiencies and start to work on addressing them. In continuing our advocacy efforts in this space, we now will work closely with the ATO to ensure the Inspector-General’s recommendations are implemented as quickly as possible to ensure the SME taxpayer audit experience is markedly improved.
Robert Jeremenko FTIA