Chapter 4

Receiving a Visit: When the Tax Office Comes Knocking

In This Chapter

arrow Understanding self-assessment

arrow Having your tax affairs audited

arrow Appealing against a Tax Office decision

T he Australian taxation system works on a self-assessment basis. This means the onus is on you to declare the correct amount of income you derive each year and claim the correct amount of tax deductions and tax offsets. However, the Tax Office has the authority to check whether you’re complying with the tax laws. Penalties apply if you understate your income or overstate your claim for a tax deduction or tax offset.

In this chapter, I explain how self-assessment works and discuss what you should do if your tax affairs are audited. I also explain how you can appeal against a Tax Office decision.

Being Honest with Yourself: Self-Assessment

In 1986, the federal government introduced self-assessment. Under this system, when you lodge a document or submit an income tax return to the Tax Office, the Tax Office basically accepts its contents as being true and correct and, generally speaking, no further action is taken. Apart from correcting any obvious mistakes, the matter ends there.

When you lodge your ...

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