Simple tricks tax office is using to catch out cheats

RINGING up employers and businesses, doing simple Google map searches and checking receipts are not falsified are some of the simple ways the taxman is catching out cheats.

For those trying to do the dodgy, the Australian Taxation Office (ATO) has warned it is on high alert.

ATO assistant commissioner Karen Foat said while the tax office had advanced data-matching technology that could catch people out, sometimes cheats could be caught by the simplest checks.

“If people are claiming large things compared with people in similar jobs and on similar incomes, then that’s something we might want to dig a little further on,” Ms Foat said.

“People often overstate the distance of a trip but it’s pretty easy for our auditors to put in location A and location B into something like Google maps to see how far a trip really is.”

Ms Foat said it was easy to calculate actual distances travelled from home to work – addresses auditors could easily obtain.

Latest ATO statistics showed 3.86 million Australians had lodged their 2019-20 tax returns and $6.3 billion had been refunded. The average refund is $2395.

BDO’s tax partner Mark Molesworth said the tax auditors worked around the clock to ensure claims were legitimate.

“You should always assume that the tax office may come and check, particularly if you are making large work-related claims,” Mr Molesworth said.

“They will contact the people you said you paid money to or the places you said you stayed.”

He said Australians should assume the tax office was going to “make sure if you did claim something, you did actually spend the money” for work.

“Always make sure you’ve recorded the expense and you’ve got the documents to prove it,” he said. “They may also ring your employer and asked if they actually reimbursed your costs. If your employer has reimbursed you, that means you can’t claim a tax deduction for that cost.”

Ms Foat said also log books provided an easy way to detect cheating: marrying up the information with public holidays or annual leave.

In one case a chef was caught out by claiming work uniforms, laundry and travel, but when the ATO contacted his employer they found his uniform was supplied and he did not travel at all for work.