The ATO have provided us with an indication of what is on their radar this tax time. The top two on the hitlist are work related expenses (which we covered in our last newsletter) and failing to declare income.
In previous articles, we’ve discussed the powers of the ATO (and other agencies) to cross-reference and data match information. Failure to declare income – no matter how small – can result in penalties as well as additional tax liabilities. Unfortunately, we are seeing people being caught out more and more frequently – often due to a genuine oversight. In a few instances the ATO have amended income tax returns without even contacting us or the client.
A couple of recent examples we’ve seen have been:
- A client failing to declare $41 of interest income from a bank account
- A revised tax payable assessment of an additional $300,000 due to cross-matching with the Office of State Revenue and identifying a property sale during the year
Both instances were innocent, explainable errors. However, the ATO was correct in their assessments and investigating and responding to the tax office resulted in additional compliance cost for the clients (this is when having audit insurance can be a blessing!)
The ATO have advised they are also targeting:
- Cash wages
- Capital gains on cryptocurrencies
- the Sharing Economy – e.g. Uber, AirBNB etc
- Foreign sourced income
For further information, please click here.
And if you’re unsure about what you need to declare as income – or think you may have forgotten to include something – we recommend that you contact your accountant so that we can assist you in meeting your requirements.