The questions start coming

Surviving an ATO audit: Part two

An ATO audit begins as a fact finding mission. Although the ATO has access to a lot of government systems, all they see are data and numbers. They may therefore ask you for more information or documents to clarify your client’s situation.


When you receive an ATO request, consider whether it is clear what the ATO wants. In my experience as an ATO Audit Director, the responses the ATO receive are either not what the ATO expects (although the adviser believes they have answered the questions) or not detailed enough, as the ATO questions may have been too generic or not specific to the issues at hand.

Spending time to discuss the request with the ATO at the outset will save your client time and money in the long run.

Achieve a positive outcome for your client

A client recently received an ATO request for voluminous documents. I contacted the ATO on behalf of my client for clarification of their request. From this conversation I was able to identify two central ATO concerns. In response, we provided a handful of documents supporting the client’s contention. The result was a quick and low cost ATO audit in favour of the client, without having to provide the ample material originally requested.

What you should do: Open the lines of communication

As outlined in our first post of this series (you can read it here), the key is to be an active part of the review process. Call the ATO officer and talk to them about their request. Open conversation allows you to elicit more background information and the ATO officer’s thought process.

To provide your clients with a less stressful audit experience, discover what the ATO really wants – beyond your initial perceptions – and get to the heart of the issue – not just what the ATO has presented.

 

What’s next?

Surviving an ATO audit: Part three – Round 1 ends, the review finishes