Add Category
Posted
The Australian Taxation Office (ATO) has ramped up its warnings about much-feared "audits" and big potential fines for any taxpayer who knowingly lodges dodgy claims.
Key points:
- Each year, the ATO contacts around 2 million taxpayers about their returns
- This year, cross-matching analytics will be used again to identify tax cheats or people who make innocent mistakes
- The president of the Tax Institute said anyone caught up in an ATO audit should be wary
The ATO says it will be scrutinising every tax return lodged for the past financial year and deploying updated hi-tech cross-checking systems to weed out inaccurate or outright fraudulent deductions.
Assistant tax commissioner Karen Foat told the ABC it is a never-ending race to keep up with tax evaders who even create elaborate websites to fake work records and receipts.
"We know that some people think it's okay to overclaim their deductions even by just a little. But our message is — that's not okay," Ms Foat said.
"A lot of people overclaiming by just a small amount adds up to $8.7 billion less each year for essential services and we can't turn a blind eye to that.
"Some people fess up straight away but some people continue the lie. But it's just better to be honest with us even if you've done the wrong thing; it will be a much less painful experience."
Each year, the ATO contacts around 2 million taxpayers about their returns and this year sophisticated cross-matching analytics will be once again used to identify tax cheats or people who make innocent mistakes.
"That can range from just a quick contact to raise questions about missing income all the way through to an audit," Ms Foat said.
"We see behaviours ranging from genuine mistakes through to deliberate overclaiming. In the most extreme cases of intentional fraud, we may seek to prosecute through the courts."
But Tax Institute president Tim Neilson warns that anyone caught up in a dreaded ATO audit should be wary.
"Any taxpayer, individual or small business who finds themselves being audited by the ATO should seek the assistance of a properly qualified tax practitioner," Mr Neilson said.
"Navigating an audit could be tricky, so it is wise to have the expertise of a tax professional who has walked this path before on your side."
Questionable claims that raise red flags with the ATO include uniforms in an unlikely work environment and inappropriate claims relating to the use of a private vehicle for work.
In today's interconnected world, Ms Foat said the ATO found that some tax dodgers have used elaborate websites to fake work records and receipts.
"We do see people using technology to try to document their claims falsely using websites to try to make up their receipts and to make their deduction claims look legitimate," Ms Foat said.
"Third-party data indicating underreported income, and deductions that appear high compared to people with a similar job and income level, also tend to raise concerns."
Ms Foat says a dreaded audit is not the first action from the ATO and that taxpayers will be asked for additional information to substantiate a questionable claim.
"Other times, we may need to have a more detailed review. We understand it can be frustrating to dig up old receipts and information, but it is necessary."
Ms Foat rejected criticism that small taxpayers face additional pressure while multinational corporations have teams of lawyers to stall legal action on their tax liabilities.
"We have a high level of investment in making sure large companies and multinationals pay their fair share. In the last couple of years our efforts have brought in an additional $1 billion in tax," Ms Foat said.
"So they're paying more tax than they ever have."
The ATO's warning comes as it is inundated with tax returns after the Morrison Government's post-election tax handout, which is expected to stimulate consumer spending.
Topics: business-economics-and-finance, government-and-politics, fraud-and-corporate-crime, tax-evasion, tax, australia