When Assumptions Meet Reality in Practice Purchases
A reflection on why some practice purchases struggle after settlement, not due to poor advice, but because assumptions, timing, and cashflow don’t always align in the real world.
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Failing to declare all your income or not lodging tax returns can lead to serious problems. The ATO uses advanced technology to track information, including data from banks, insurance companies, and other sources, to find people who aren’t complying. This process is often automated, so it’s harder to avoid detection.
If the ATO finds undeclared income or missed returns, they can issue amended or default assessments. Challenging these assessments is difficult because you’ll need to prove that the ATO is wrong and provide the correct figures for your taxable income. This can be tough if you don’t have the necessary records, and very few people have successfully done this in the past.
For example, even in a recent case where the ATO made mistakes in calculating the income, the taxpayer still lost because they couldn’t prove the assessment was too high.
The ATO can also impose penalties and fines for failing to lodge returns or declare income. It will be your responsibility to prove that the penalties are unfair. Additionally, the ATO can go back several years and issue new assessments if they believe there has been fraud or evasion, and again, you’ll have to prove they are wrong.
To avoid these issues, it’s important to declare all income and lodge your returns on time. If you think you’ve missed something or made a mistake, it’s best to seek professional help to get everything sorted out as soon as possible.
A reflection on why some practice purchases struggle after settlement, not due to poor advice, but because assumptions, timing, and cashflow don’t always align in the real world.
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