Hi Experts,
I am planning to lodge my tax return with an registered tax agent.
He is claiming some deductions (though small amount) for work related expense.
Wanted to ask, if my return is lodged by a registered agent, can I still be questioned by ATO? Can ATO ask me about any clarification about the expense, or will ATO reach out directly to the agent, if they have any questions regarding my return.
Generally, the ATO will first contact the agent as they prepared the return. One thing to keep in mind though is that ultimately you are the one responsible for your own personal tax affairs.
and the agent will pass that hot potato onto you in about 3 seconds flat when the ATO comes knocking.
if my return is lodged by a registered agent, can I still be questioned by ATO? Can ATO ask me about any clarification about the expense, or will ATO reach out directly to the agent, if they have any questions regarding my return.
Yes, Yes, Directly to you.
I though this practice was meant to change. If the authorised contact is the tax agent then the ATO should contact them and not the tax payer in most circumstances. See IGT recommendation 5.5 http://igt.gov.au/publications/reports-of-reviews/income-tax…
Probably will change. One day. It's the ATO. They don't care much for recommendations unless it's mandatory.
if you have a registered agent, the ato will communicate with the agent.
I don't think that's what OP is getting at though. The ATO will communicate with the agent, but the OP remains liable for whatever is put in their tax return
if my return is lodged by a registered agent, can I still be questioned by ATO
Yes
Can ATO ask me about any clarification about the expense
Yes
or will ATO reach out directly to the agent, if they have any questions regarding my return.
Both, but at the end of the day the agent is 100% care and zero responsibility for the return. You signed it off to say its 100% correct and valid.
Your only defence is "I agreed to the data based on the professional opinion of the accountant".
I have a feeling that minor- or edge-case infractions will have higher chance to be ignored if lodged by an accountant, based on my personal experience. I have no proof to back this up.
Also note that ATO are the last few years going totally rogue and ape on people. They are actually fining people for legal claims, and spreading misinformation. I would not be taking risks on your return right now.
I had this exact thing happen to me. The ATO said to me that it didn't matter if you used an agent or not, submitting the return is your responsibility and if anything is wrong it's your fault. I asked how I was supposed to know if the agent had made a mistake if the reason I use an agent is because I don't know the law? Their answer? Not our problem.
ATO expects people to either get their accountant to fix it or fire old accountant and hire a new accountant to fix it.
yeah. I can understand fixing the mistake, I just didn't think it was fair to be fined. I guess what it means is that being a 'registered tax agent' means nothing when it comes to getting your tax done.
Tax agents/accountants are not agents of ATO, they're just someone you hired to do the Tax return for you. It's like anyone else that you hire to do your bidding ie. lawyers/builders/plumbers- which are all "registered", it's not a guarantee the work they produce will pass regulations but you can always take the agent to court if the work is not up to standard.
My agent offers "insurance" if I'm audited. I've never taken it up, but I think from memory it's $200 extra for all the work required to complete the audit
You will need to sign off on the agent's submission (of your tax return).
You will be responsible for the content.
You are paying the tax agent for their knowledge etc., but the onus remains on you.