Question

A client for whom you have prepared the current tax return approaches you for advice and support for an audit covering the last five returns. You were not involved in the preparation of the previous four returns. The client has written notice from the ATO regarding the audit. What advice will you provide and what support will you give? (

PLEASE: 300 words

Answer 1

Answer:

If a client for whom you have prepared the current tax return approaches you for advice and support for an audit covering the last five returns, and you were not involved in the preparation of the previous four, then if the client has the written notice from the ATO regarding the audit, then you will advice him either to ask the previous specialist or to provide additional detailed information about that four returns and only then you can support him in processing his tax returns.

Tax agent will advice taxpayer either to ask the previous specialist or to provide additional detailed information about that four returns and only then you can support him in processing his tax returns. Audit is made if any inaccuracies in income, deductions or entitlement are discovered which provides evidence that the tax payer has not fulfilled their obligations.

When the taxpayer receives the notification letter, they would normally contact their tax agent to review relevant records, tax returns and activities statement in preparation for the initial interview.

When conducting the review or audit the ATO will provide the taxpayer with all reasonable assistance and explanations to clarify their meaning, allow the taxpayer to choose someone to act on their behalf or to attend interviews with them.

Penalties that the ATO might apply can be significantly reduced by explaining to the auditor before the audit and in one case where this was done the taxpayer was fined $600 while the maximum fine which could have been applied was $10,000.