ATO issues warning after ‘unprecedented’ spike in impersonation scams

Over $1 million in losses and more than 40,000 impersonation scams has raised alarm bells at the tax office, with clients warned on impersonated ATO phone numbers and pre-recorded messages.

The ATO has seen an unprecedented number of pre-recorded phone calls impersonating legitimate Tax Office phone numbers.

Over the first quarter of 2019, the ATO received 40,225 reports of impersonation scams with just over $1 million in losses

Assistant Commissioner Gavin Siebert said that scammers have adopted ‘Robo-call’ technology to target taxpayers across the country.

“Scammers are sending pre-recorded messages in record numbers and are manipulating caller identification so that your phone displays a legitimate ATO phone number despite coming from an overseas scammer,” said Mr Siebert.

“We are now seeing thousands of Australians missing a call from a scammer, returning the call based on the number on caller ID and speaking to legitimate members of the ATO. Our calls do not show a number on caller ID nor do we use pre-recorded messages.

“If the scammers do make contact, they will request payment of a tax debt – usually through unusual methods like bitcoin, gift cards and vouchers. Legitimate ways to pay your tax debt are listed on our website. The scammers will threaten you with immediate arrest, attempt to keep you on the line until payment is made and may become rude or aggressive.”

Mr Siebert said that taxpayers that receive a pre-recorded message should hang up and delete the voicemail.

The ATO regularly contacts taxpayers by phone, email and SMS but will never request that clients click on a link directed to a login page, request unusual payment methods such as cryptocurrency or iTunes cards, threaten with immediate arrest, jail or deportation, and request a fee in order to release a refund owed.

Reporter
05 April 2019
accountantsdaily.com.au

Crypto transactions in ATO sights with new data-matching program

Up to 1 million taxpayers who have engaged in buying, selling or transferring cryptocurrency will now be subject to ATO scrutiny as it begins a new data-matching program ahead of tax time.

The ATO will begin collecting data from cryptocurrency-designated service providers, under notice, to identify individuals or businesses who have or may be engaged in buying, selling or transferring cryptocurrency during the 2014–15 to 2019–20 financial years.

The Tax Office has estimated that records relating to between 500,000 and 1 million individuals will be obtained.

The data-matching program will give the ATO visibility over whether taxpayers are correctly meeting their taxation and superannuation obligations in relation to cryptocurrency transactions and ownership. These obligations may include registration, lodgement, reporting and payment responsibilities.

The ATO will give taxpayers 28 days to clarify any information that has been obtained from the data provider, before any compliance action is taken.

“We want to help taxpayers to get it right and ensure they are paying the correct amount of tax,” said ATO deputy commissioner Will Day.

“Where people find that they have made an error or omission in their tax return, they should contact the ATO as soon as possible. Penalties may be significantly reduced in circumstances where we are contacted prior to an audit.”

Cryptocurrencies have been in the Tax Office’s sights in recent years, with the latest data-matching program marking a renewed effort from the agency to stamp out non-compliance ahead of tax time 2019.

It is understood that the ATO will be working with other regulators, in particular the Australian Transaction Reports and Analysis Centre (AUSTRAC) and ASIC, as well as other international regulators as part of the Joint Chiefs of Global Tax Enforcement (J5) to investigate cryptocurrency-related tax evasion and money laundering.

Speaking to Accountants Daily, CPA Australia head of external affairs Paul Drum said that accountants should start asking clients about any cryptocurrency transactions as part of their tax-time checklist.

“If you don’t ask the question, you may not get the answer because many taxpayers see crypto gains and losses like betting wins and losses, and they are not thinking about it in an income tax context, so it is incumbent on advisers to ensure they ask clients and bring to their attention that there is a review going on and they might wish to make a voluntary disclosure before the Tax Office comes knocking on their door,” Mr Drum said.

“They are talking about 500,000 to 1 million taxpayers, and in a country with a population of 25 million, that is quite astounding that it’s the number that it has grown to already.”

Mr Drum said that it was vital that advisers raised the message with their clients early on, ahead of any action from the Tax Office.

“Many of them had a supernova moment in 2017. If you look at bitcoin, for example, it had a meteoric rise in 2017 and then an almost similar drop going from around $20,000 to about $7,300 now, so there will be taxpayers who may have undeclared realised gains from 2015, 2016, 2017 financial years, but now they are in losses because of the drop-off,” Mr Drum said.

“They may have realised gains in which they have a tax obligation that they haven’t declared for some reason or another — an honest mistake or tax evasion — and they won’t have any money to pay the bill because they’ve got losses after the event in a different financial year.

“If they left it in or traded one crypto for another crypto, unless they actually cashed out and banked the money, they might have ridden the market down and may have trouble paying any tax bill.”

Jotham Lian
01 May 2019
accountantsdaily.com.au

Government to establish $2 billion fund for small business lending

The Government has announced that it will establish a $2 billion Australian Business Securitisation Fund and an Australian Business Growth Fund to provide longer-term equity funding for small businesses.

Small businesses currently find it difficult to obtain finance on competitive terms unless it is secured against real estate. To overcome this, the proposed Australian Business Securitisation Fund will invest up to $2 billion in the securitisation market, providing additional funding to smaller banks and non-bank lenders to on-lend to small businesses on more competitive terms.

Encouraging news, but definitely a wait and see!!

AcctWeb

How the 2019 Federal Budget affects you

The following links take you to that section of the 2019 Budget that affects you most.

Easy to watch videos and written detail covering the four main areas of the 2019 Federal Budget, plus, for those who like to read, a link to the Budget documents themselves.

Your Budget:

Lower Taxes

Guaranteeing Essential Services

Investing in our Community

Budget Documents

Source: www.budget.gov.au

Federal Budget 2019 – Overview

The Government’s economic plan and this Budget are building a stronger economy and securing a better future for all Australians. This Budget and our economic plan are:

Returning the budget to surplus
Delivering more jobs
Providing lower taxes
Guaranteeing essential services like Medicare, schools, hospitals and roads

The following video outlines Australia’s plan for a bright and robust future for all Australians.

Source: www.budget.gov.au

Employers hit with rolling SG audits as ATO toughens stance

Employers are increasingly being subjected to a rolling series of audits by the ATO where they slip behind on their SG obligations as the Tax Office now taking a harder line on non-compliance, warns a technical expert.

Insyt chief executive Darren Wynen said the focus by the federal government on SG non-compliance has seen the ATO taking a much tougher approach towards non-compliant employers.

“[In the past], when the ATO audited an employer to check whether they had SG obligations, it would almost be like a self-correction so their view was that if the employer paid it and fixed it up then it would be okay. Now when they audit employers, they’re applying the full suite of penalties,” said Mr Wynen.

Mr Wynen said he has also seen some situations recently where the employer has been subjected to an audit and in the finalisation letter there has been a requirement for them to provide evidence that they have also met their obligations for the latest quarter.

“If that evidence is not provided [to the ATO], then they will effectively commence another audit,” he warned.

“They may have had a year's worth audited for let’s say the 2018 year and if they then haven’t complied with the obligations for the December quarter then the ATO will open up the file and audit their obligations from July 2018 through to December 2018.”

This means that an employer who is continuously not meeting their obligations could be subject to a continuous or rolling series of ATO audits to make sure they’re complying with their super guarantee obligations, he warned.

“Businesses need to check they are satisfying their SG obligation because it will be a whole lot of cost down the track in the event they are audited or subject to a review by the ATO,” he said.

“Businesses are having to spend a lot of money challenging these assessments – particularly if they’ve paid it – to try and get these penalties and so forth remitted.”

While the ATO confirmed that it will waive Part 7 penalties for clients who voluntarily disclose historical underpayment of the superannuation guarantee, despite the proposed amnesty measure not yet being law, employers must still pay the interest amount and the $20 administration component per employee per quarter, in addition to the SG they owe.

“In relation to SG, the ATO only has the discretion to remit the Part 7 penalty. With regard to those taxpayers who made a voluntary disclosure in anticipation of the proposed amnesty, we will remit the Part 7 penalty in full,” the ATO previously told Accountants Daily.

Miranda Brownlee
28 March 2019
accountantsdaily.com.au

New quarterly STP reporting method for closely held payees revealed

The ATO has shed light on how employers will be able to report quarterly for closely held employees under the new single touch payroll regime, including the ability to make amendments before an extended finalisation due date.

The Tax Office previously announced that the closely held group will be granted a one-year exemption from STP reporting, with employers due to start quarterly reporting from 1 July 2020.

The ATO’s definition of a closely held employee is one who is a non-arm’s length employee, directly related to the entity from which they receive payments, including family members of a family business, directors of a company and shareholders or beneficiaries.

Recognising that closely held payees are not always paid on a regular basis or a regular amount, ATO director Michael Karavas said the agency will adopt several methods for employers to make reasonable estimates to report on a quarterly basis.

The ATO will allow employers to calculate the amounts through actual withdrawals, not including payments of dividends or which reduces the liabilities owed by the business entity to the closely held employee; 25 per cent of the salary or director fees from the previous year per quarter; or by varying the previous years’ amount within 15 per cent of the total salary for the current financial year.

“If you lodge quarterly using one of the methods, then the ATO will accept that you made a genuine effort to meet your STP obligations and that will allow you to do that finalisation and make any adjustments at the time you do your tax return at the end of the year,” said Mr Karavas.

While other businesses will have to provide a finalisation declaration by 14 July each year, the ATO has granted an extension to closely held payees to the due date of their income tax return.

“We are not saying that you need to know your final position by 14 July but we are saying you have made a reasonable estimate, each quarter reported throughout the year and by doing that you are able to make reasonable adjustments at the end of the financial year,” said Mr Karavas.

“You'll be able by the due date of your tax return, make that finalisation of what your actual final salary and wages or directors fees are. That finalisation will then make information available through pre-fill for that person's tax return”

Legislation to introduce STP across businesses of all sizes was passed last month, with the ATO granting a three-month buffer to 30 September 2019 for small businesses to transition to the new regime.

The ATO has also released a detailed register of STP products for micro-businesses, with several options currently available.

Jotham Lian
19 March 2019
accountantsdaily.com.au

Some Australian figures to help on Budget night.

One great source of data about Australia. Become better acquainted with the country we love.

An up-to-date snapshot of Australia's vital statistics.

Please click on the following link to see all this interesting information. The areas covered are:

Overview
Markets
GDP
Labour
Prices
Money
Trade
Government
Business
Consumer
Housing
Taxes
Climate

Access all this data here.

The problem with getting to 53 years of age.

Here's some food for thought and another reason why getting professional help from a financial planner is worth serious consideration.

Previous articles in this series, which are based on research conducted by Vanguard Investments Pty Ltd, show that a financial planner adds around 3% to what would be the expected return of an investment portfolio. In other words, they provide the expertise and time needed to help you attain your retirement goals and they can help cover their costs at the same time.

However, more research from the Vanguard Investments stable focuses on the significance of the age of 53.

53 is when most of the costs of parenthood are on the decline, a cause for great celebration, but, sadly, it seems declining also is our 'financial capability'. This research has its fair share of confusing terms and definitions such as 'crystalised intelligence' (‘wisdom’ to you and I), 'fluid intelligence' (which peaks, unfortunately, in our early 20's); and 'financial capability'.

When all this is mixed together and the graphs and charts have been drawn the result is that 'the peak age for financial decision-making is…53!'. Ouch!!, and at a time when most of us need the opposite to be true, ‘c'est la vie’.

While many of us are still capable, this research indicate that after we reach 53 another benefit of employing the expertise of a financial planning practice is that their input is provided when we need it the most. That is, during the final 10 year run up to retirement, when there's still time to generate the retirement outcomes you want.

The following are some of the big decisions to be made around the age of 53.

• How do we make the transition to retirement?

• How do we structure our finances to generate an income and deliver capital gains?

• How do we maximise our government entitlements?

• What tax issues need to be considered?

• Will we have enough given our current financial position?

These are big decisions and when relying on your own resources, it’s worth remembering that sometimes we just don’t know, what we don’t know!

Peter Graham
BEc, MBA
General Manager
PlannerWeb / AcctWeb

Lost Beneficiaries

How does an executor trace a missing beneficiary?

Under the Administration of Estates Act, the law says there is a legal obligation to find and distribute estates of people who die without making wills.

But Centrelink insists that identifying anyone, even to a lawful estate trustee, is an invasion of privacy. So, one government department will not report to another.

Apparently, it is easier than the alternative of helping people get what is rightfully theirs.

Do you have an up to date will or might your executor face extra costs and beneficiaries miss out?

AcctWeb