Australians are being warned against using artificial intelligence (AI) to create fake receipts to fool the Australian Taxation Office (ATO). ChatGPT recently introduced its 4o Image Generation tool, which can create incredibly realistic pictures with just a few prompts.

While it will no doubt be a game-changer for some sectors, there are fears that people will use it to draft up some dodgy deductions when it comes to tax time. Financial expert Josh Lee told Yahoo Finance that Aussies might try to slip small payments through using this method.

"It definitely adds another layer of complexity to it," the Link Wealth Group director said.

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"If you're putting through a few little ones, what's the likelihood you're going to be audited?

"Unless you're trying to put through $10,000 or $20,000 worth of dodgy receipts, that's maybe a little bit different.

"It's gonna make [accountants and the ATO's] lives definitely a lot harder in terms of cross-checking whether that's actually legitimate."

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'New era of tax evasion' revealed in new ChatGPT update

A TikToker recently shared an example of how ChatGPT's Image Generation tool worked.

She asked it to produce a receipt for a restaurant, and the AI platform spat out a fairly realistic image in seconds, complete with fake pizza orders, the date and time of purchase, and the tax amount.

But here's where the update got conerning.

She asked ChatGPT to make the receipt look "hyperrealistic" and crinkled as if it had been sitting in a drawer or someone's purse for a few months.

Lo and behold, the AI bot obliged and produced this exact image.

TikToker and AI expert Easy dAIsy said this could usher in a "new era of tax evasion".

ChatGPT said it's new image tool comes after plenty of hard work translating text into images.

"GPT‑4o image generation excels at accurately rendering text, precisely following prompts, and leveraging 4o’s inherent knowledge base and chat context—including transforming uploaded images or using them as visual inspiration," it said.

ATO's warning against Aussies using AI

But the ATO has warned Aussies that they can and will be caught if they try this tactic.