‘We’ll see far more audits and more letters’: ATO to ramp up crackdown on dodgy returns.
Hundreds of thousands of Aussies are expected to receive “please explain” letters this year amid a dramatic escalation in the ATO’s crackdown on the $8.7 billion “tax gap”.
Dodgy, work-related claims like dry cleaning and car expenses will once again be the most closely scrutinised, along with investment property deductions and earnings from cryptocurrencies and sharing economy platforms like Uber.
“I think just the intensity of the focus is probably different this year,” said H&R Block director of tax communications Mark Chapman. “The ATO has been given additional resourcing by the Government to back up the work they’re doing in relation to noncompliance. I think we’ll see far more audits and more letters in relation to incorrect claims around work-related expenses and property, and we’ll see far more data-matching around cryptocurrency and the sharing economy.”
Mr Chapman said “hundreds of thousands of people” had received letters last tax time after their claims were flagged as unusual or the ATO discovered undeclared income by cross-checking data provided from third parties.
“An audit is really just one componen
t,” he said. “They do a lot of investigation in this space through technology — they data-match, they have benchmarks, if expenses are outside the norm people will get a letter which is not a full audit, it invites them to think again.” Mr Chapman said the most important thing to remember was that if you “can’t substantiate it, you can’t claim it”. “Make sure you’ve got the receipt or invoice or bank statement that proves you incurred the expense,” he said.
t,” he said. “They do a lot of investigation in this space through technology — they data-match, they have benchmarks, if expenses are outside the norm people will get a letter which is not a full audit, it invites them to think again.” Mr Chapman said the most important thing to remember was that if you “can’t substantiate it, you can’t claim it”. “Make sure you’ve got the receipt or invoice or bank statement that proves you incurred the expense,” he said.The expense must also be legitimately related to your job. “If you’re not sure whether you can make a claim or not, go and get some help or advice, speak to a tax agent who’ll be able to tell you what you can claim and what you can’t,” he said.
More than 2.2 million Australians claimed over $47 billion in deductions in the 2017-18 financial year, led by work-related expenses and rental claims.