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Poor Record Keeping Penalties

Businesses who continue to keep poor records, despite warnings from the Tax Office, will face penalties.

Tax Commissioner Michael Carmody said under the law penalties can be imposed for poor record keeping in recognition of the fact that without proper records, there can be no guarantee that people are meeting their tax responsibilities.

"During field visits and audits, record-keeping practices will be checked and people will be given a written report including suggestions for improvement where required," Mr Carmody said.

Generally, people will be given an opportunity to improve their record keeping before penalties are considered.

If people do not take this opportunity then penalties of up to $2,200 may apply.

"We will not penalise those who make honest mistakes or those who have made a genuine attempt to improve their records," Mr Carmody said.

"Also, people won't be penalised if it's clear that the correct amount of tax has been paid despite the poor records.

"Our emphasis is on helping people to both keep good records and to meet their tax obligations.

"We offer a range of assistance to help businesses do their tax, including free electronic record-keeping software."

The Tax Office has developed a penalties and record-keeping practice statement in consultation with business people.

Check with your accountant if you have any doubt about your record keeping practices.

Copyright ATO, 1 February 2005.

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