One of the latest ATO initiatives is to issue ‘assurance letters’ to taxpayers. These are issued in an effort to reassure people that they have met their compliance obligations. While most client correspondence from the ATO is sent to our office on your behalf, these letters are being set to clients directly. So what are these letters about?
Upon lodgement of a document (eg. Income tax return, Business Activity Statement), clients are ‘risk assessed’ by the ATO using computer models and then the information is data-matched against other sources (eg. Bank, superannuation funds, Centrelink, Department of Transport etc). These letters basically advise people that the information provided to the ATO has been checked against the information in the tax office systems and other sources and has been found to be correct.
As part of our role as your accountant, we review all the information you’ve provided to us before finalising and sending the return to you for signature. If we feel that something within your return might be out of the benchmarks for your personal situation – or trigger an ATO red flag - we will contact you for further clarification or substantiation. With the increase in data-matching, any anomalies will be queried by the ATO eventually – so it’s best off declaring everything from the start.
The good news is that if you receive one of these letters, it is simply for your records and no other action is required.