WHO THE ATO ARE TARGETING THIS YEAR!

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, cryptocurrency earnings and sharing economy platforms like Uber.

The ATO investigate through technology — process of data-match, benchmarks and summary of expenses.  Taxpayers with claims that are outside the norm will receive a letter from the ATO.

With regards to rental properties, the in-depth audits they conduct this year are expected to double, with a specific focus on over-claimed interest, capital works claimed as repairs, incorrect apportionment of expenses for holiday homes let out to others and omitted income from accommodation sharing.

The most important thing to remember is that if you can’t substantiate it, you can’t claim it!  Make sure you’ve got the receipt/invoice or bank statement that proves you incurred the expense.  The expense must also be legitimately related to your job.  

If you’re not sure whether you can make a claim, seek our advice.  We’ll be able to tell you what you can claim and what you can’t.

We also note that the ATO are targeting supposed non compliance by setting up shop in specific suburbs (i.e. Dandenong).  They are inviting businesses to attend their seminars and attending businesses to introduce themselves.