Taxes can be a very complicated matter for people who have significant investment portfolios, who own complex businesses, or even for those who simply have a couple of different income streams. Unfortunately, the Australian Tax Office (ATO) is run by humans, which means that it does make mistakes from time to time. If you think that the ATO has got it wrong, then you should consider speaking to your accountant and taking the appropriate action. Doing so could potentially save you a lot of money, especially if you are sure that a mistake has been made.
What are my options if I think the ATO is wrong?
If you think that the ATO has made a mistake, then the first thing that you should do is have a chat with your accountant. Consider the following things:
- How major the mistake is – If, after speaking with your accountant, you decide that the mistake is relatively minor, you might decide to simply ignore it. Make sure that you understand if and how it could affect you in the future if you decide to go down this path.
- Whose mistake it is – If the mistake lies with you, then you will need to request to amend your tax return. The ATO should let you do this without penalty, but if you leave it too long you may start to get penalties on any money you have owed to the ATO. However, if it is the ATOs mistake, and you aren’t concerned about it, then you may choose to ignore it altogether.
- What you can do to correct it – This is probably the most difficult thing to think about. Sometimes it is very simple to correct a mistake made by the ATO, but in some cases it can be almost impossible.
If your accountant gives you an opinion that you aren’t too sure about, then you should consider getting a second opinion from another accountant, especially if the mistake is a major one. Doing so can help prevent you landing in hot water or looking stupid for chasing a ‘mistake’ that actually wasn’t there.
Once you are sure, you can lodge a dispute:
Once you are sure that a mistake has been made by the ATO, you can lodge a dispute. You have the right to have any decision reviewed, no matter what the ATO says. You need to make sure that you have all of your documents and evidence pointing towards an ATO mistake ordered and available. In extreme cases where a lot of money is at stake, it could also be worth speaking with a tax lawyer to maximise your chances of winning your dispute.