The ATO has indicated that they will be paying greater attention to businesses that have claimed losses in the 2008-09 year.
Reviews and audits of micro, small to medium and large businesses, with carried forward tax losses by the tax office have revealed some common problems that can easily be avoided.
Two of the most common mistakes that are made by taxpayers are:
- not retaining sufficient documentation to substantiate the tax losses, and
- claiming tax losses which were originally calculated incorrectly and then carrying forward losses that they are not entitled to.
The ATO has recommended that taxpayers keep detailed records to support their tax losses.
It may be advisable that taxpayers with losses carried forward confirm their losses and make adjustments to any losses carried forward where necessary.