In this period with the prolific and ever growing use of cashless transactions, conducting businesses and buying goods and services online and big data, George Orwell’s statement in “1984” that “Big Brother is watching you” resonates now in 2017 as it did when first published in 1949. 

The ATO has the ability to receive and request data from third party organisations and use it to match to what you have reported in your income tax returns, activity statements and other forms lodged with the ATO. Data matching is an essential part of the ATO strategy to identify businesses that appear to be not reporting all their income or complying with their tax obligations.

The ATO collects information from:

Source

Information Provided or Focus Area

Online Selling Sites

Sellers who have sold more than $12,000 in goods and services

 

Credit card and debit card information from financial institutions

Deposits and funds received on those accounts

Banks, other financial institutions and investment bodies

Investment income (ie. Interest, dividends and trust distributions)

Employers

Payments to employees and contractors

State Motor Vehicle Registry

Sales, transfers & newly registered motor vehicles over $10,000

State Titles Offices

Sales and other transfers of real property

Government Bodies

Pensions, benefits, rebates, taxable grants and other payments

Australian Transaction Reports and Analysis Centre (AUSTRAC) and our international treaty partners

Foreign income

Stock exchanges and share registries

Share transactions (ie. purchases & sales of shares)

Businesses in the building and construction industry

Payments made for building and construction services

Health insurers

Health insurance cover and premiums paid

The ATO will match the information received from third party organisations to the tax returns and forms lodged. Any discrepancies may bring instigate an ATO audit or review of a taxpayer’s tax affairs where questions will be raised and you will be required to explain and justify any discrepancies. If you are unable to prove that the ATO’s information is incorrect, you are exposed to paying the additional tax, penalties and interest charges.

The team at EMspire Advisory, are experienced in managing and liaising these situations with the ATO on our client’s behalf. If you have been identified by the ATO because of their data matching for review or wish to obtain more detailed information, contact us today.