The Federal Budget handed down in May had a clear message to Australian Taxpayers: The ATO has a multi million-dollar government endorsement by way of an extraordinary amount of funding to collect tax dollars like never before.
The Government pledged $318.5 million over 4 years to increase the effect and presence of the ATO. The ATO claims that it requires this level of resourcing to:
implement new strategies to increase compliance activity to specifically target tax agents and individual taxpayers through increased audits;
make improvements in debt collections; and
implement new strategies to combat the black economy, including measures to identify and prosecute tax agents who enable phoenix operators and black economy activities.
Undoubtedly, the ATO will be looking to justify its’ enormous funding by a demonstratable increase in tax collections. Therefore, the ATO will do this by:
initiating more audits and pre-audit activity including risk reviews, “please explain” letters arising from data matching with other government and non-government agencies and institutions;
increasing contact from the debt collections area. The ATO has a vast array of tools at its disposal to collect debts, including garnishee notices (on banks and employers), a statement of claim, director penalty notice and a creditor’s statutory demand; and
increasing prosecutions, crackdown on phoenix operations with a dedicated team and so called “phoenix offences”, extending the Director Penalty regime to make director’s personal liable for unpaid GST and reforms to the ABN system to engender a higher level of integrity.
The ATO prides itself on letting you know what their upcoming focus areas will be via their publication entitled “what attracts our attention”. The publication was updated in May this year to reflect the funding from the Budget. What is most interesting about the publication is that it leaves no stone unturned and serves to highlight that the ATO is interested in anything that is outside of their definition of a “norm”.