Case Study 1: Dealing With An Ato Audit

The problem

A new client came to us with a 40-page dossier of alleged breaches and faced $750K worth of fines and alleged unpaid tax.

An ATO audit is intimidating for any business. Even if they have done nothing wrong, businesses generally only have 60 days to lodge an objection to the ATO’s findings.

Unfortunately, with the ATO’s new data matching system, audits seem to be becoming more and more common.

What did we achieve?

We reduced the level of fines and unpaid tax by 90%.

We did this by taking the time to understand how our client’s businesses worked and undertaking a meticulous examination of the facts of the case.

It turned out the ATO had fundamentally misunderstood the nature of our client’s money transfer business and had grossly overestimated its revenue.

His business charged a fee to transfer people’s money overseas but the ATO treated not only the fee, but all of the money transferred into our client’s possession as income. We uncovered this error, drafted an objection and were able to successfully argue our clients case.

Our client also faced the rejection of the valuation of his $1.2 million property as the ATO claimed he lacked sufficient supporting documentation. We countered this claim by using our industry knowledge, expert contacts, and forensic accounting techniques to prove to the ATO the client’s property was worth even more than he originally claimed. Hence the ATO was force to accept this new valuation and reverse their original decision.