50,000 tax refunds stopped by ATO

We don’t usually publish articles direct from mass media but this one may be inmportant for some of our clients.


Tax refund

50,700 tax returns have been stopped and scruitinised by the Australian Tax Office.

MORE than 50,000 people have had their tax returns stopped by the Australian Taxation Office for suspected over-claimed or fraudulent tax refunds this financial year.

Latest data from the ATO shows since July 1 more than 5.45 million individual tax returns have been lodged for the 2011-12 financial year.

That is an increase of about 261,000 returns processed in the first two months compared with the same time last year, and the amount of refunds paid so far is also up by $40 million to $9.76 billion.

About 12.4 million individuals will lodge an income tax return this financial year but not all will do the right thing.

The figures show of the returns lodged in July and August more than 50,700 were stopped and had the microscope put over them.

Of these, 11,000 tax returns have been released after there has been cross-checking and the validation of third-party information, for example from employers.

About 6900 reviews have been completed and another 32,800 tax returns remain on hold for further review and compliance action has commenced on about 11,800 returns.

HLB Mann Judd tax partner Neil Wickenden said before lodging a return, Australians should carefully check their finances, particularly claims they have made.

“You need to ensure that whatever you put in your return that it’s completely accurate,” he said.

“More particularly where you are claiming deductions of any sort you have got substantiation and supporting records, that’s one of the things the ATO have said in their 2012-13 compliance program they are going to scrutinise.”

Mr Wickenden said whenever a return is lodged and a refund is issued, you should assume the ATO would look at your return more closely.

In 2011-12 around 109,000 income tax returns were stopped for potential over-claiming or fraud and about 79,000 of these required a full review, which the ATO said protected around $200 million of revenue.

Lodging returns electronically has also risen dramatically with 1.62 million returns lodged through the e-tax 2012 service in July and August, compared with 1.57 million at the same time last year.

Last year 73 per cent of Australians lodged individual returns online.

The ATO said electronic tax returns were 35 per cent less likely to require manual corrections compared to returns lodged manually.

This year the tax office is keeping a close eye on individual from the defence force and also working in information technology.

Get your Tax Return in by 31 October 2012 or Risk Fines

Penalties for not lodging your return can be significant but there’s an easy way to avoid them.

Personal tax returns in Australia are due to be lodged with the Tax Office by 31 October and covers the last financial year (July 1, 2011 – June 30, 2012).

The people you worked for from July 1, 2011 – June 30, 2012 are legally obliged to have sent you all your payment summaries by now[1]. So if you have not yet lodged your tax return and have received payment summaries then you better get a wiggle on and book an appointment and get your return lodged.

What happens if you don’t lodge by 31 October?

If you have not lodged a tax return and have not registered with a tax agent by 31 October then you may be subject to ‘failure to lodge on time’ penalties. This is especially true if you owe tax, have more than one outstanding return, a poor history of lodgement, or have not complied with a request to lodge[2], and for this the penalties can be significant. Because a new fine can be generated approximately every month that the return is late, (up to a maximum of 5 periods) they can add up rapidly especially with high interest applied. In some cases the Tax Office may even lodge a default assessment for you[3].

Of course, the best way to avoid fines is to simply lodge your return on time. But if for whatever reason you still don’t think you may be able to do your tax before October 31 you may significantly reduce your risk of penalty if a licenced tax agent registers you as a client on the ATO Portal[4].

Whatever you do, never avoid lodging a return because you’re afraid you may have to pay tax. Trying to avoid the tax office is a no-win strategy, and, invariably you will end up in a much worse financial position than getting your return in on time!

Some of us find the thought of doing a tax return daunting, and others simply can’t find the time.  But don’t leave it too late. 31 October is rolling around fast.

At Mr Tax Refund, we do all the hard work for you. All you need to do is email, fax or SMS your source documents to us and we call you at a convenient time to complete and lodge your return. It usually only takes 20 minutes and we can call you after hours and weekends to avoid taking time out from work.

What’s more there are no complex forms to fill out and you don’t have to pay a thing up front as we can take our low fees from your refund. If you are in need of your cash fast at your option we can also send your tax refund to your bank in one business day or less[5].

Get Mr Tax Refund to prepare your return before October 31 and not only will you receive a great service at rock bottom rates; you’ll also sidestep any possible fines.

Simply visit http://www.mrtaxrefund.com.au/ and follow the simple sign up instructions, or call us on 1300 829 227 today.

[1] Still don’t have your payment summaries? Call your employer as they may not have an up to date address for you.

[2] ATO “Guide to lodging your tax return” http://www.ato.gov.au

[3] ATO “Default assessments for overdue tax returns” http://www.ato.gov.au

[4] The Tax Agent Portal is a large database of Australian taxpayers and registered tax agents secure access to client information and online communication with the ATO.

[5] Extra Fees apply for this service.

Mr Tax Refund Launches SMS Document Delivery Method

Mr Tax Refund clients can now photograph and text their required tax documents directly to their tax consultant .

‘Its a great option for busy people on the go and will help reduce the time it takes for our clients to get their refund’ said Stephen Burns Mr Tax Refund CEO.

As from today clients can SMS us anything they need to on our new SMS number 0458 111 333


2.68 billion in Australian tax refunds made available in the last 30 days – have you got yours?

In the past 30 days the Tax Office has made over $2.68 billion available for tax refunds. Time to see Mr Tax Refund for to get your refund sent to your account in 24 hours or less!

Over 1.2 million refunds have been made avaiable at an average of about $2,200 each.

In the past month Mr Tax Refund has advanced many customers refunds much higher than this average.

If you’ve left doing your return for a number of years its even better as you may be due much more than the average $2,200. Last month one lucky client received over a refund of over $17,000 for a multi-year tax return and we forwarded $3,000 of that to his bank in 1 business day – so he was over the moon!

If you haven’t already thought about lodging a return now is the time – your refund awaits.

Contact Mr Tax Refund, and start thinking about what you’ll spend your refund on.