How to Deal With an Unexpected Audit
Nobody likes to hear that they are up for an audit of their tax returns, but it is all too common with the Australian Tax Office (ATO) continuing to apply a high level of scrutiny to personal tax returns and business returns. While it can be scary to get an audit notice, it helps to remember a few simple tips.
Be polite and patient
The ATO staff are just doing their job and it never helps to be abrupt or aggressive. Do everything you can to answer their questions quickly and politely and they'll be more than happy to finish up and move onto the next person on their audit list.
Hunt out those receipts
While it can be hard to hang on to the receipts that you need for years, the ATO will generally accept digital scans so it is getting much easier to keep a good record of your receipts and logs. Try downloading a cloud storage app to your smartphone so that you can scan and store receipts as soon as you get them, and this will make it much easier to provide receipts down the road.
If you are having trouble finding some of your old receipts. it can be worth getting in contact with your accountant as they may have stored or scanned some of your receipts from past years (or at least have some more details to help you get a copy of your receipts).
Ask for help
Some of the questions that you can get during audits can be hard to understand, especially if you are a little stressed and not that confident with financial matters. It can be well worth having someone from your accounting firm sit with you in any meetings with the ATO so that you can answer their questions confidently and accurately. This is a very common activity for accountants, and many accountants offer a service called 'audit protection' where you can get insurance to cover a significant amount of accounting fees in the event that you do get audited This fee is also tax deductible for businesses and individuals.
If you have been hit with an audit notice, don't stress. Stay polite and professional in your dealings with the ATO. If you need extra support during this time, accounting services can be an invaluable source of professional knowledge and experience, as they regularly support clients who are being audited.