ATO focus on small businesses and wealthy individuals
The ATO has released a new online resource and printed booklet that sets out its approach to managing tax compliance risks for small-to-medium enterprises (SMEs) and wealthy individuals. The detailed new resource informs SME market taxpayers of their key rights and obligations. It also provides important information on ATO processes, including risk-assessment procedures, compliance activities and the ATO's private-group approach.
The ATO says a "private group" is a group of entities under the control of an individual and their associates. The ATO uses a private-group approach to identify and profile wealthy individual taxpayers and their groups within the SME market. Speaking at a recent seminar highlighting the release of this resource, held by law firm Maddocks in Sydney, ATO Deputy Commissioner, Small and Medium Enterprises, Michael Cranston, noted that the approach provides the ATO with an "indicative" view of the group obtained via powerful data-mining techniques.
Mr Cranston also explained the ATO's use of its risk differentiation framework (RDF) in assessing the level of risk each taxpayer presents. The RDF is split into four risk categories, from lower-risk taxpayers and medium-risk taxpayers through to key taxpayers and higher-risk taxpayers. This allows the ATO to determine the amount of resources and the responsive activities required for each category. Mr Cranston noted that the RDF for the SME segment "goes one step further" as each category also contains the approximate total number of SMEs, Highly Wealthy Individuals and Wealthy Australians in that category.
The new resource also addresses recommendations made by the Inspector-General of Taxation, including recommendations made in the recent review of the ATO's use of early and alternative dispute resolution (ADR) processes.
The new resource is available on the ATO website at www.ato.gov.au/smecompliance.
Source: ATO media release 2012/37, 22 August 2012, www.ato.gov.au/corporate/content.aspx?doc=/content/00329769.htm
