Yahoo Finance ATO’s tax-time warning: ‘We will track you down’
Think you can fudge the numbers to the ATO? Think again.
The Australian Taxation Office (ATO) has issued a stark warning to Aussies who think they can downplay their income to pay less tax.
The ATO said it had expanded its data-matching capability to ensure taxpayers didn’t leave out income or inflate deductions this tax season.
The ATO will now get data from property managers, landlord insurance providers, financial institutions providing loans for residential investment properties and sharing-economy providers, as well as income-protection policy information.
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“This isn’t a game of Guess Who, as our sophisticated data-matching programs provide us with all the clues we need to track down taxpayers with incorrect information in their tax return,” ATO assistant commissioner Tim Loh said.
“We will use this information to identify and educate taxpayers who have made incorrect claims in their return, with a longer-term plan to pre-fill as much information as possible in future years.”
Landlords making the most tax mistakes
The ATO’s review of income tax returns found nine in 10 rental property owners were getting their returns wrong.
Loh said two new data-matching protocols started this year for rental investors, including investment-loan data and landlord-insurance-policy information.
“Around 80 per cent of taxpayers with rental income claimed a deduction for interest on their loan, and this is where we’re seeing mistakes,” Loh said.
“For example, you can’t refinance an investment property to buy personal items, like a holiday to Europe or a Tesla, then continue to claim the interest expenses as a tax deduction.”
The ATO has reminded taxpayers that insurance premiums paid for rental properties can be claimed as a tax deduction. Similarly, any insurance payouts received in relation to an investment property must be reported as income.
“This new data provides us with crucial intelligence to paint a picture of what’s true and accurate in tax returns,” Loh said.
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