ATO – What attracts our audit attention
To help you taxpayers get things right, you should consider the behaviours, characteristics and tax issues t
With over eight million Australians claiming work-related expenses each year, Assistant Commissioner Graham Whyte is reminding people to make sure they get their deductions right this tax time.
“Australians claim over $21 billion in work-related expenses each year, and we want to support taxpayers to claim what they are entitled to – no more, no less,” Mr Whyte said.
“Most Australians want to do the right thing, but we are seeing mistakes, and while the amounts at an individual level are relatively small, collectively the overall impact is significant. That’s why, it is important for people to get their deductions right.
“From time to time we see people deliberately making incorrect claims. We’ve seen claims for car expenses where log books have been made up and claims for self-education expenses where invoices were supplied for conferences that the taxpayer never attended.
“Deliberately making incorrect claims is an easy way to get into some serious trouble. It’s just not worth it.”
Mr Whyte said while most tax agents are there to help you do the right thing, sometimes the ATO identifies tax agents offering special deals, inflating claims to generate larger refunds.
“If it sounds too good to be true – it usually is. The ATO takes action against tax agents who make dodgy claims, but to protect yourself, make sure your tax agent is registered. You can check on the Tax Practitioners Board website.”
Mr Whyte said in 2014-15, the ATO conducted around 450,000 reviews and audits of individual taxpayers, leading to revenue adjustments of over $1.1 billion in income tax.
“Cases involved omitted income or over-claimed entitlements like deductions. This included people making claims significantly different to those made by taxpayers in similar circumstances,” Mr Whyte said.
“Every tax return is scrutinised using increasingly sophisticated tools and data analytics developed by our ‘Data Doctors’ at the ATO. This means we can identify and review income tax returns that may omit information or contain unreasonable deductions.
“When a red flag is raised, our staff investigates further and if your claims seem unusual we will check them with your employer.
“If you’ve made a mistake, this will hold up the processing of your tax return, so it’s best to make sure you claim the right deductions from the start.”
My Whyte said this year the ATO has introduced real-time checks of deductions for tax returns completed online.
“If your claims are substantially higher than others in similar occupations, earning similar amounts of income, a message will appear, asking you to check them. This new process is just about helping you to make sure your claims are correct,” Mr Whyte said.
“If you are doing the right thing you have nothing to worry about. If you make an honest mistake we will help you fix it up and correct your tax return. We will not penalise you if you genuinely tried to get it right.
“But, if you didn’t make a reasonable or genuine attempt to get it right or are intentionally doing the wrong thing, you may receive a penalty.
Mr Whyte said it was easy to keep on the right track with your work-related expense claims by remembering three golden rules.
“One, make sure you spent the money yourself and were not reimbursed. Two, make sure it is related to your job, and not a private expense. Three, keep a record to prove it,” Mr Whyte said.
“We’ve got a range of guides including specific occupation guides on our website to help people understand what they can claim. If you use a tax agent, you can also ask them for advice on the right things to claim.
“You can also make it easier on yourself by using the myDeductions tool in the ATO app to record your work-related expenses on the go. You can then upload directly into your next tax return just like your pre-filled information.”