14th November 2016
On 1st November the ATO published on their website a list of “What Attracts Our Attention” in the Privately Owned and Wealthy Groups” section. The list goes over a number of issues where the ATO believes there is non-compliance that is eroding the tax base. The idea is that they recover tax by triggering audits or encourage compliance under our tax system which is based on self – assessment, by making it known they are watching.
Here is a link to the posting:
To a large extent the list includes the usual suspects ranging from the inadvertent to the contrived.
Included in the list are some common areas where the complexity of the tax law has gotten completely out of hand and where there is urgent need for tax reform. Tax topics affecting ordinary small business and family taxpayers such as Trust Income and Division 7a Loans from companies and trusts are unmanageable by the ATO. The article is targeted at the tax profession and is somewhere between being a threat and a plea for assistance to help manage our unwieldy tax system. Interestingly around the same time the ATO released a posting to their website entitled “Let’s Talk” reaching out to the tax profession and acknowledging that the ATO and the tax profession depend on each other for success. If the tax system doesn’t get fixed and there is over reliance on the tax profession (at the cost of the taxpayer) the system is at risk of collapse through revolt or widespread non-compliance.