We stress that substantial penalties can be imposed under the Income Tax Assessment Act if your tax return is found to be incorrect or the required information to support your claims is not available. If, in the future, a Tax Office audit finds the return to be incorrect and imposes penalties, the penalties will accrue from the date of lodgement of the tax return.
Retention of Records
It is vital that you retain all documentation supporting claims in your tax return. You must keep these documents for a period of 5 years.
Capital Gains Tax (CGT) Records
It is your responsibility to keep appropriate records to calculate any taxable capital gains or losses that may be derived from time to time.
Please do not hesitate to contact us regarding the capital gains tax records required to be held.
Notes for Persons Signing Income Tax Returns
Please note that under the new Tax Agent Services Act ‘safe harbour’ provisions are potentially available to taxpayers to avoid administration penalties. However in order for the provisions to apply both you as the taxpayer and us as your Tax Agent must comply with certain conditions. Outlined below are the conditions required to be met by you as the taxpayer and us as your registered Tax Agent.
Under the Tax Agent Services Code you are able to rely upon relief from administration penalties where we have been engaged by you as a registered Tax Agent to prepare your tax return. However, in order for you to be able to rely upon these measures the onus rests with you as the taxpayer to prove that you have provided us, as your Tax Agent, with all relevant information within sufficient time to allow for lodgement of your tax return.
In addition to this requirement we also wish to draw your attention to the following issues which will need to be considered and confirmed prior to signing the Tax Return.
Please confirm the following in relations to the disclosures in the tax return:
- That income from all sources have been disclosed;
- That all deductions claimed can be justified;
- That all deductions claimed for work, car and travel expenses can be substantiated by the required records and receipts;
- That all statements are correct and complete
Capital Gains Tax and Overseas Income
Every sale of property of any description should be considered for the possible application of both income tax and capital gains tax.
Your attention is specifically directed to the questions concerning the sale of property; income derived from overseas sources and property located overseas.
The worldwide income of Australian resident taxpayers is taxable in Australia with a credit allowed for the income tax paid in a foreign country on that income.
Substantiation of Work, Car and Travel Costs
If you would like us to provide you with details of the record keeping requirements to substantiate any deductions claimed for work, car and travel expenses please ask us. Where claims have been made in your return for any of these expenses, substantiation requirements need to be clearly understood before signing the declaration included on the front cover of your return. If you have any doubts, these should be resolved before signing the declaration.
False and Misleading Statements
If an answer to a question or any statement made in an income tax return or an attached schedule appears to be incorrect, incomplete or misleading, please provide us with the necessary information required to amend the tax return.
The Australian Taxation Office is reliant upon self-assessment by taxpayers. The issue and payment of an assessment does not imply the tax liability for the year has been finalised.
As a consequence, onus is placed on taxpayers to ensure that income tax returns are as compete as possible and contain no misleading statements or information. All taxpayers may expect some attention from the Australian Taxation Office about their past taxation affairs. The penalty for any errors and omissions detected at that time may be substantial if several years have passed since the income tax return was lodged and assessed.
As your registered Tax Agent we will need to ensure that, to the best of our knowledge and abilities, your tax return has been completed (based on the information that you supplied) accurately and in line with the relevant taxation legislation applicable to your circumstances.
In addition to this in order for you to be able to access the ‘safe harbour’ provisions we will need to prepare your tax returns without any intentional disregard or recklessness.
Assuming all of the responsibilities of you as the taxpayer and us as the registered Tax Agent are complied with, this should reduce the potential for any administrative penalties to be imposed by the Australian Taxation Office.
Should you have any queries or concerns in relation to the above please do not hesitate to contact us. Otherwise, please sign this form as an acknowledgement of your understanding of your responsibilities in signing your return and return it to us with your signed return.