As part of an ongoing campaign to address non-lodgement, the ATO has issued default assessment warnings that require urgent attention.
The warnings were sent out on December 14, 2011, to clients who have overdue income tax returns where we have evidence they received taxable income in the relevant financial years.
According to a recent statement from the ATO, if the overdue returns are not lodged by 3 February 2012, they will issue default assessments for the clients concerned based on the estimated taxable income included in the letter.
If the ATO issues a default assessment to you or any of your clients, you or they may incur the following:
- failure to lodge on time penalties
- administrative penalties of 75 per cent of the tax related liability from the default assessment, after taking into account any pay as you go (PAYG) credit and any other tax credits available (administrative penalties may increase by 20 per cent if your client has had a penalty previously applied for a default assessment).
What you need to do
If you receive a letter concerning yourself or any of your clients, make sure the relevant parties:
- are aware of the impending default assessment and
- lodge the relevant income tax returns by 3 February 2012