Request for Amendment of Income Tax Return for Individuals

Lodging your Individual Tax Return (ITR) can sometimes lead to errors. If you discover you have omitted income, forgotten to claim legitimate deductions, or made a technical mistake, you have the right to submit a request for amendment of income tax return for individuals that has already been lodged.

Could i request for amendment of income tax return ?

This comprehensive guide will provide detailed information on the process of lodging an amended individual income tax return via the ATO's myTax portal, helping you understand the crucial timelines and the risks associated with an ATO audit amended tax return individuals.

I. Understanding the Amended Tax Return

1. What is a Tax Return Amendment?

An amendment request is the formal process of advising the Australian Taxation Office (ATO) about one or more errors that occurred in a previously lodged and assessed Tax Return.

• Definition and purpose of the amendment: The purpose of the amendment is to accurately reflect your true financial position, leading to an adjustment of your tax liability (the tax payable or the refund amount).

• Distinction between 'Amendment' and 'Objecting to an Assessment':

  • Amendment: Used when you proactively identify an error yourself and wish to correct it.

  • Objecting to an Assessment: Used when you disagree with a ruling or decision made by the ATO (typically following an audit or a specific determination).

2. Time Limits for Requesting an Amendment

The ATO imposes strict time limits on making tax return amendments:

• Standard time limit for most individuals: You have 02 years from the date the original Notice of Assessment was issued to request an amendment.

• Special time limits for individuals with international dealings: For more complex situations, particularly those involving international dealings or large entities, the limit can extend up to 04 years.

II. Reasons for Amending Your Tax Return

An amendment is typically required when there is a significant discrepancy between the information you lodged and your actual tax liability.

Why do you need to amend your income tax return?

1. Errors in Income Reporting

This is the most common reason, often resulting from oversights or missing information:

• Omitted income (e.g., Bank interest, non-pre-filled dividends): For example, you lodged your return before the ATO received sufficient pre-fill data from banks or listed companies, leading to the omission of interest or dividend income.

• Incorrect reporting of capital gains (CGT): Reporting the wrong amount of capital gain or loss from the sale of assets (such as shares or investment properties), or incorrectly applying the 50% CGT discount.

2. Errors in Deductions & Tax Offsets

Many people amend their returns to correct errors related to deductions and tax offsets:

• Missed or incorrect work-related deductions: For instance, forgetting to claim home office expenses, or other work-related costs for which you later found valid receipts.

• Errors in calculating investment property expenses (Rental Deductions): Mistakes in calculating property depreciation or running costs (Rental Deductions).

• Missing Tax Offset information (Rebates): Overlooking information required to receive a tax offset (Rebate), such as Private Health Insurance details.

3. Change in Residency Status

Amending the return due to incorrect residency status (Resident/Non-resident): Your Tax Residency status profoundly affects how your tax is calculated. An amendment is required if you lodged as a resident when you should have been a non-resident, or vice-versa.

III. Lodging Your Request for Amendment of income Tax Return via MyTax

Lodge your amended individual income tax return online through myTax; it is the fastest and most efficient way.

1. How to Lodge an 'Amended Tax Return'

Using myGov/myTax to access the original return: Log in to the myGov portal, select the link to the ATO, then choose 'Manage tax returns' and find the return for the financial year you wish to amend.

Specific steps for requesting an amendment online:

• In the Tax Return for that year, you will see the 'Amend' option.

• The system will reload the previously lodged return, allowing you to edit the specific items that were incorrect or missing.

• Simply enter the corrected values into the relevant fields. MyTax will automatically recalculate the tax outcome.

Request for amendment of income tax return for individual form

2. Evidence and Explanatory Notes

The importance of retaining and attaching evidence: You must retain all supporting documentation (receipts, logbooks, statements) for 05 years from the date the amended Notice of Assessment is issued. For large amendments, the ATO allows you to attach copies of these documents directly during the request submission.

What detailed explanation should be provided to the ATO: When amending an item, provide a brief, clear explanation for why the amount is being changed (e.g., “Forgot to include interest income from XYZ bank - $150” or “Found receipt for work-related uniform cost - $350”).

3. Processing Time and Outcome

Expected processing time for an amended individual income tax return: Typically, amendment requests lodged via myTax are processed within 02 weeks.

Understanding the Notice of Amended Assessment: After processing, the ATO will issue a Notice of Amended Assessment (NOAA). This document replaces the original Notice of Assessment and details your new tax liability (a new refund or a new tax debt).

IV. Audit Risks After Amendment

While you are legally obligated to correct any errors, lodging an amendment request can increase the likelihood of your return being selected for an ATO audit.

1. ATO Audit on Amended Tax Return Individuals

Why an amendment increases the likelihood of an audit: The ATO's systems automatically flag significant changes compared to the original return. An amendment request, especially if it results in a large increase in your refund or a substantial decrease in your tax debt, is considered a high-risk indicator.

Key areas the ATO scrutinises in an amended return: The ATO is particularly interested in:

• Large increases in deductions (e.g., a 500% spike in Work-Related Expenses).

• Changes related to investment properties (Rental Deductions, CGT).

• Changes to residency status.

2. Consequences of Incorrect Amendments

If your amendment request is found to be incorrect or insufficiently substantiated, the ATO can apply penalties:

Applicable penalties and interest charges (General Interest Charge - GIC): In addition to having to repay any wrongly received refund plus the original tax, you may face penalties and the General Interest Charge (GIC). The GIC is a high daily interest rate applied to your overdue tax debt.

3. When to Use a Tax Agent

Benefits of using a Tax Agent for complex amendment requests: If the amendment involves complex issues like CGT, foreign income, or property depreciation, engaging a Registered Tax Agent is essential. They have the expertise to ensure the changes are calculated correctly, comply with ATO rules, and are supported by the necessary evidence, thereby mitigating the risk of an ATO audit amended tax return individuals.

V. Conclusion: Final Advice

Lodging an amended individual income tax return is both a right and a legal responsibility. By proceeding carefully and honestly, you will ensure your tax records are accurate and avoid future complications with the ATO.

If your amendment involves complex issues like Capital Gains Tax (CGT), Rental Deductions, or international dealings, don't risk an ATO audit. Contact Gordon QC Du & Associates. Led by Mr. Gordon QC Du, our team offers over 20 years of dedicated expertise, ensuring your submission is accurate, compliant, and fully substantiated to minimise audit risk.