Tax man beefs up tech trickery to catch out dodgy declarations

THE Australian Taxation Office is sharpening its technology systems that catch people cheating on tax returns, making it harder to hide income or claim dodgy deductions.

After Covid-19 stimulus payments such as JobKeeper dominated the ATO’s efforts in 2020, a stronger compliance focus has emerged this tax time and a rising number of third parties are supplying people’s financial data for the Tax Office to process.

Assistant commissioner Tim Loh said the ATO was expanding data sources and refining analytics to include areas previously off the radar, such as cryptocurrency and the sharing economy.

“We are focusing on addressing over-claiming of deductions and under-reporting of income – especially those that are deliberately doing the wrong thing,” he said.

“The ATO is receiving income data from a range of organisations, be it the banks, state revenue offices, land title offices, motor vehicle registries, share registries, ASIC, online selling and payment platforms, sharing economy platforms and cryptocurrency exchanges,” he said.

Mr Loh said the ATO also sourced information from insurance companies about assets including luxury cars over $65,000, boats over $100,000, fine art over $100,000 and racehorses over $65,000. It could then examine whether people’s assets reflected their declared income.

NDA Law senior associate and tax specialist Lisa Christo said the ATO had multiple avenues to track spending and income, even for small transactions.

“I sympathise that people do not like paying tax but do not underestimate the abilities of the ATO,” she said.

“Just because you think you may be a comparatively insignificant taxpayer does not mean that the ATO can’t or won’t ask you to substantiate your claims.

“Then you will not only have to pay the additional tax but also interest and penalties.”

Ms Christo said the ATO was using its increased datamatching capabilities to clamp down on “cash under the table” businesses.

Senior accountant Kate Bruce from dmca advisory said people could not sell assets such as property and shares without being monitored.

“It is becoming easier for the ATO to review information in a tax return,” she said.