Hi all, in the past few weeks we have seen an increased number of delayed returns, please explains and even audits this early into the tax season.

The problem is, even if you have a good and legal reason for what they are asking you, sometimes you get stuck with an unpleasant ATO employee who will dig deeper into other aspects of your return just to find something they can go at. Wanted to share few tips to avoid being contacted by the ATO.

Ill break them down into 3 different categories.

Category 1 - Not waiting for the information to be available

Here are a number of really simple reasons that you may be automatically flagged for an amended return/audit.

Not including all or incorrect amounts per your payment summaries (with STP try to ensure the income statement is finalised before lodging)

Not including all interest earned from all bank accounts/term deposits etc

Not including unfranked dividends or not waiting until trust annual tax statements have been issued to finalise your return.

Not including spouse income in your return to avoid medicare levy surcharges

Claiming personal superannuation contribution deductions without notifying the Fund of your intention to claim a deduction.

Category 2 - Things that may require a "please explain"

If your interest deduction for a rental property has been decreasing and is all of a sudden much more than prior years. This may result in a please explain to see if you redrew funds for personal reasons.

If you are claiming motor vehicle expenses in D1 and do not have a registered motor vehicle in your name, they may ask you to prove that you are the beneficial owner of the vehicle. For example that you have a private arrangement with the registered owner and that you pay all costs associated with owning the vehicle.

Category 3 - Most likely to get a full blown audit

Claiming significant donations, especially in proportion to your income. It is very cost effective for the ATO to pursue as they just have to ask for your donation receipts, its usually black or white on whether you have the receipts.

Claiming interest/dividend deductions and not actually having interest/dividend income.

Claiming significant education expenses. To claim courses, textbooks, stationary, the education being undertaken must have a connection to your current work activities and maintain the specific skills/knowledge equired in your current work activities.

That is all for now. Might update as the year goes on. Sorry for rambling.