Being Audited and missing an invoice or two

Discussion in 'Accounting & Tax' started by MorganHB, 5th Jan, 2017.

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  1. MorganHB

    MorganHB Well-Known Member

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    Hi all,

    I'd like to know what the implications are if you have a rental statement from the PM and there is an expense line for say $200.00 with a local plumber. It is expensed against the income, but there is no invoice attached.
    Now say i submit everything to the ATO via my accountant, I randomly get audited and the auditors find out i dont have this invoice.
    What are the ramification of this?
    do you get let off, do they apply some logic or is it very black/white?

    Thanks,
    Morgan.
     
  2. D.T.

    D.T. Specialist Property Manager Business Member

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    Forget ato for a minute , where the heck is your invoice is the more important question here?

    Invoices should be attached to your rental statements from your PM. Has your PM misplaced it, or did the $200 go to their own pocket?
     
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  3. JacM

    JacM VIC Buyer's Agent - Melbourne, Geelong, Ballarat Business Member

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    Ask the PM to provide the invoice. If needs be the plumber can reproduce the invoice
     
  4. Ross Forrester

    Ross Forrester Well-Known Member

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    My experience with the ATO on audits is that they are quite accommodating to people who are upfront.
     
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  5. Biz

    Biz Well-Known Member

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    Death penalty.
     
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  6. D.T.

    D.T. Specialist Property Manager Business Member

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    Had that a few times, get used to it after a while :p
     
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  7. Scott No Mates

    Scott No Mates Well-Known Member

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    They must've gone easy on you
     
  8. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    If it was on the agent stmt they may be satisfied. If it was a substantial cost they may even review the PM records to identify if the plumbing repair (example) was a genuine repair or a replacement !! In a recent case they imposed penalties on a taxpayer whose agent was asked by the owner to mis-label such a cost. The PM advised the ATO of the fact and it was considered to be a serious offence. If you are honest and answer any questions accurately and dont seek to mislead to mis-portray, embellish etc you should be OK.

    Remember sometimes the ATO seek the original invoice details to do a nose/tail audit. They gather the evidence then they audit the handiman to see if they failed to declare all income. Common.

    I would just allow ATO to find that missing substantiation records and if they want it - Ask for it at that time. For a few hundred bucks they may not care. But if you claimed 10 other dubious issues they may well ask for it also.
     
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  9. MorganHB

    MorganHB Well-Known Member

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    Hey DT, they've misplaced it. its not attached but they 'lost it'.
     
  10. MorganHB

    MorganHB Well-Known Member

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    Thanks!!
     
  11. MorganHB

    MorganHB Well-Known Member

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    haha classic!!
     
  12. MorganHB

    MorganHB Well-Known Member

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    Great information Paul - Much appreciated.
     
  13. Mike A

    Mike A Well-Known Member

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    how would a $200 amount be capital. even if it was an improvement then unless you are running a business of rental properties you can get an immediate deduction for an amount under $300.

    The immediate deduction is available if all of the following tests are met in relation to the asset:
    • it cost $300 or less
    • you used it mainly for the purpose of producing assessable income that was not income from carrying on a business (for example, rental income where your rental activities did not amount to the carrying on of a business)
    • it was not part of a set of assets costing more than $300 that you started to hold in the income year, and
    • it was not one of a number of identical, or substantially identical, assets that you started to hold in the income year that together cost more than $300.
     
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  14. Yson

    Yson Well-Known Member

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    right, sometimes, i do not the invoice attached, may be it's time to ask for a copy when i do not see it.
     
  15. JacM

    JacM VIC Buyer's Agent - Melbourne, Geelong, Ballarat Business Member

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    Normally a PM would email the copy of invoice at the same time as the relevant property management statement, and then post the original to you at End of Financial year along with the End of Financial Year property management statement...
     
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