ATO targets Pond drillers

The chickens do come home to roost. In our last issue of ADP we ran an interview with Chris Tant of Davey Financial Management which is a must read for all dentists.

It detailed how dentists should be prepared for the inevitable day when they are subjected to a taxation audit by the ATO.

Well they swept into Moonee Ponds and 40% of the dentists involved had adjustments to increase taxable incomes. Of these more than 80% of the adjustments related to undisclosed and/or incorrect calculation of dental fee income and expense items such as conferences, travel, wages and purchases.

John Wallis, group manager of Sydney tax and accounting services writes in The Davey Report: "The results confirm our experience that many accountants do not understand the tax legislation as it relates to the medical and dental professions. The lesson to be learned is that receiving your tax assessment each year is not the end of the story. There is a 'hibernation factor' involved with the ATO self-assessment system. That is, in the majority of cases the ATO will accept your tax return exactly as you have lodged it. The onus is 100% with the taxpayer to ensure that the information is correct.

"Be aware... the bear does not hibernate forever. Sooner or later, the tax man will come knocking at your door. When he does you need to be able to support and justify what has been included in your tax return. This is the real test of quality and for 40% of the dentists in Moonee Ponds area the test was failed at great cost".