The tax law is the same for everyone.
Tax Law. Ever wondered what the fancy accountants tell their clients?
Your interaction with the tax law can be divided into two areas.
The first is tax the tax return (which is better if you have planned in advance). This is like when you see your accountant at the end of the year and go through what you can claim – but what if you did this in advance, before the year started? How many times have you thought to yourself “I wish I’d done this or that, then I would have been able to claim this” or after talking to a friend or someone you meet at a barbeque “Why didn’t anyone tell me about this?” There are probably things you should be doing now which you don’t even know that you don’t know. You could well be overpaying, which is great if you have the cash to spare and are happy to donate it to the Government, but not so great if you have something else that you wanted to spend it on.
This is where the perception that the rich know all these strategies to minimise their taxes come from. They pay these fancy accountants and lawyers. They know the loopholes. Actually, they usually just plan ahead to take advantage of the incentives that are legally available within the tax system. When this is done, all your paperwork is solid and in order which means it is much more capable of withstanding ATO scrutiny.
The second area is when you are contacted by the ATO and go through a audit, review, objection process or appeal.
The ATO officers audit people all the time, you are probably their 1000th audit, whereas this might be your first audit. This places you at a significant disadvantage. The Government had to choose who to give the power to when it came to tax disputes, and it chose the ATO. That’s why the ATO has the power to recover money from you personally even if you use a company, it can garnish your bank account, it can guess how much tax you owe and take you to Court and force you to pay it, even if the amount is wrong. It is up to the tax payer to prove that the ATO is wrong. It is guilty unless proven innocent.
With this much power, the ATO is not afraid of much, but I have noticed they are noticeably more restrained when they are dealing with someone who knows what they are doing. We’ve had clients who were badly bullied by the ATO and told me all sorts of stories about the officer, but when we’ve spoken to the same officer about the technical issues the officer has been all politeness. This seems to be a recurring trend.
Many clients ask if they can or should put in a complaint. To be honest, we tell them normally not to bother. It is a waste of time and effort, and the audit process is wasting enough time already. Further, the complaints process will not achieve anything. Being aware of your rights and ensuring the ATO officer comes to the appropriate technical conclusion is the only reliable way.
Our team includes qualified tax lawyers and chartered accountants which means we are uniquely placed to cover all aspects of tax law – at the end of the day, tax comes down to a calculation, which is why the accounting qualification is so important. However, all of the evidence, paperwork and documentation needs to be set up and drafted properly (e.g. having an effective trust deed, or the appropriate contracts and loan arrangements) which is where the legal expertise comes in. The legal expertise is also key in ensuring that your tax affairs are done in a way that will set you up for a win in Court if you ever need to, and when it comes to actually conducting a dispute, our legal skills come to the fore and are key to ensuring the best outcome.
Why would you use us?
You would want to use us if:
You want to make sure you are not paying more tax than you are legally required to pay.
If you are setting up a business or entering a new transaction and you want to make sure you are appropriately set up for tax and asset protection.
You want to get the best possible outcome after being selected for audit or review, or if you need to object or appeal. The best results occur when we are involved early. It is also considerably cheaper.
Frequently Asked Questions about Tax Law
Strategy is key. So is planning. Tax is all about strategy and planning.
We can assist with all areas of income tax – so tax treaties and international tax, corporate tax, capital gains tax, Division 7A (shareholder loans), withholding tax (interest, dividends, royalties, PAYG), permanent establishments, capital works, capital allowances, hire purchase arrangements, Division 250, the taxation of financial arrangements, rollovers, tax consolidation (including tax sharing and tax funding agreements), thin capitalisation, foreign exchange, trusts, partnerships (including limited partnerships), controlled foreign companies, transfer pricing and director penalty notices, to name just a few.
We can also assist with GST, FBT, payroll tax, stamp duty, land tax and superannuation.
Yes. We draft our own unique trust deed which is customised to your circumstances. It is not a template from the internet. It is designed precisely in accordance with your tax plan.
We prefer to be open and transparent with the ATO and argue the technical issues.
We won’t hide assets or income, but we will work out the best legal structure or argument for you. Over the years we have built a reputation with the ATO for being open and transparent, and this is important to us.
Obviously you need to think about what information you are providing and what this means for you, and you should have a strategy, but we are not the team for you if you want to deliberately hide information.
The ATO have very strong information gathering powers and are also much more comfortable when the battle is about finding information. The law is very clearly on their side and it is simply not smart most of the time to build a strategy around fighting and winning that battle. At most you will delay the inevitable and the ATO can play the trump card of issuing you a large assessment and then it will be up to you to prove they are wrong (it is guilty unless proven innocent in tax) which means you will end up having to reveal a lot of information anyway.
The same applies to disputes, we plan ahead and put forward a robust technical position. Your interaction with the ATO should not be about them looking for information that you have not shared, it should be about what the correct answer is and how much tax you ought to be paying given your circumstances.
If you build a positive relationship with the ATO, it will help later for example in negotiating payment arrangements, seeking to having interest and penalties reduced or waived or seeking assistance in the case of financial hardship.
We can arrange the preparation and lodgements of these documents. However, in full disclosure except in exceptional cases this will be done in partnership with our tax lodgement affiliate.
We operate in all states in relation to federal taxes (basically all taxes the ATO administers) and in most states for state based taxes (and we can request the assistance of someone else in our network of reliable professionals if need be).
We are both. This gives us a unique advantage when dealing with tax matters as we are just as strong on the compliance side when it comes to calculating your tax liability and with substantiation as we are with preparing documents (such as trust deeds and loan agreements) and arguing your case in Court (or setting you up for the best possible chance of a win in Court).
We also use both sets of skills when negotiating with the ATO and feel this gives the greatest chance of getting the best possible outcome as we understand the full spectrum of the tax law, how it operates, and how it is administered.
If you are looking for a low touch high yield approach to tax then we are the right firm for you. Low touch means minimising your stress by managing the situation and setting up the right structures and processes. High yield means maximum results for the lowest possible time and input.
We have experience dealing with the ATO at all levels – for clients from the big end of town, to medium sized businesses to small businesses – and essentially rely on our experience, technical acumen and contact network to get the best results we can. We just want to get you the best results we can and do what we can so you can focus on your strengths of growing your business and making it successful.
Our track record speaks for itself. We have a great relationship with the ATO and with our clients.
You can expect the same level of quality as a big 4 accounting firm or a top tier law firm (our director has worked at both) but for a price affordable for small to medium sized businesses.
Call us and talk your matter through with us. The first call is free, and we have probably dealt with a matter similar to yours so we will be able to give you a ball park cost quite quickly.
If you have any other questions about tax law, please contact us
Feel that sense of confidence from knowing your taxes are correct and comply with the tax law.
Business is our Signature
Audits and reviews can be a gruelling experience and disputes with the ATO can cost you everythingmore than just time and money, but also lost opportunity in terms of resources and time you could be devoting to growing your business. In tax, the onus is on the taxpayer to prove that the ATO is trying to overtax them (i.e. you are guilty until you prove yourself innocent) and even if you successfully challenge an ATO determination, it can often be too late. Adam Ahmed & Co Lawyers offer a range of options for handling our client’s taxation matters, from tax planning, providing tax advice, negotiation, managing audits, lodging objections and engaging in litigation.