ANAO review of ATO’s CGT performance
“Gavin: It would appear that tax agents and taxpayers can expect further scrutiny from the ATO as it begins to ramp up its CGT audit activity.”
A report by the Australian national audit office (ANAO) into the effectiveness of the ATO’s handling of CGT for individual and small business taxpayers was recently tabled in the House of Representatives.
The report stated that CGT presents particular compliance challenges for taxpayer intending to fulfil their tax obligations and administrative challenges for the ATO – essentially related to:
- The one-off nature of capital events;
- The extensive record keeping requirements for taxpayers; and
- The ATO’s reliance on third-party data , particularly for the compliance activity with individual taxpayers.
Furthermore, the report stated that “going forward, there is considerable uncertainty about CGT compliance activity and the potential revenue from individual and small business taxpayers.”
It specifically took a swipe at some tax agents who, because of time pressure, failed to keep up-to-date with legislation, and as a result:
- Failed to ask the right questions;
- Provided incorrect advice; and
- Mislabelled and incorrectly reported capital gains
Overall, it recommended that the ATO undertake an evaluation of its CGT compliance strategies and prepare an annual CGT project delivery plan.
The ATO agreed with the recommendation.
Ref: ANAO Report No.51 2014/15 Performance Audit
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