Earn
Overclaimers warned to ‘fess up’ before ATO knocks
The Australian Taxation Office (ATO) has warned it’s paying close attention to every tax return lodged and is on the hunt for incorrect claims this tax time.
Overclaimers warned to ‘fess up’ before ATO knocks
The Australian Taxation Office (ATO) has warned it’s paying close attention to every tax return lodged and is on the hunt for incorrect claims this tax time.
Despite the threat, assistant commissioner Karen Foat wants to assure taxpayers doing the right thing that they have nothing to fear from a potential audit.
But for those people who have done the wrong thing, the assistant commissioner’s advice is to fess up sooner rather than later, even if they have only overclaimed by a little bit.
With the ATO contacting around 2 million people about their returns each year, Ms Foat flagged that, “in most cases, audits are not our first action”.
She said, sometimes, concerns can be raised purely thanks to third-party data that indicates reported income and deductions that appear high compared to people with a similar job and income level.
“If we do decide to look a little closer through an audit, you can expect that we will contact you or your tax agent to make further inquiries,” Ms Foat said.
“The sort of information we may need from you or your agent will vary depending on the circumstances.
The assistant commissioner noted that, oftentimes, the ATO is “just looking for an explanation and documentation on a deduction”.
“For example, if you’ve claimed deductions for clothing but you work in a job where a compulsory uniform is unlikely, we may just want to know a little more about why you’ve claimed that deduction.”
Other times, Ms Foat said the ATO may need to undertake a more detailed review.
“Though, again, this generally involves us asking you or your agent for more information or evidence to support your claims,” she continued.
“We will always let you know what issues have attracted our attention and what information we will need from you.
“Our biggest tip is to ensure you work with us from the beginning and provide the information required to help us resolve any concerns and finalise the audit.”
The assistant commissioner flagged that anyone who thinks they’ve made a mistake or an error in filing their return, “the best thing you can do is to ‘fess up’ as soon as possible”.
“If we haven’t been in touch with you yet, you can amend your return yourself on myTax, or if you use an agent to ask them to lodge an amendment for you,” she explained.
If the ATO has been in contact, it’s important to be honest and get the matter resolved quickly, Ms Foat noted, with taxpayers “more likely to face penalties if they aren’t honest with us once we come knocking”.
“We understand it can be frustrating to dig up old receipts and information, but it is necessary,” she said.
“A small amount of overclaiming by a large number of people adds up to $8.7 billion less each year for essential services; we can’t turn a blind eye to that.”
About the author
About the author
Tax refund
PM ponders extension of low and middle income tax offset
Scott Morrison has hinted that a popular tax-saving measure may return in 2022. ...Read more
Tax refund
ATO issues final warning as tax deadline looms
Time is running out for those who are still putting off taking the time to do their taxes. ...Read more
Tax refund
ATO set to improve comms skills after review
Australia’s tax collector has been told to get better at dealing with complaints, appeals and the rights of taxpayers. ...Read more
Tax refund
Late lodgers face fines but aren’t completely out of luck
It usually pays to lodge your taxes on time, but you have a few options if you miss the deadline. ...Read more
Tax refund
Side hustlers should take care when it comes to tax
Both side hustlers and more traditional SMBs need to think ahead when it comes to staying on top of their tax obligations. ...Read more
Tax refund
The ATO is targeting side hustlers: Here’s what you need to know
If you don’t keep on top of what your side hustle means for your tax obligations, you’re asking for trouble. ...Read more
Tax refund
Why your tax return could be better than usual this year
If there was ever a year when it was worth doing your taxes on time, it’s this one. ...Read more
Tax refund
ATO issues tax tips for first-time share and ETF investors
The ATO has offered a helping hand to first-time ETF investors facing the burden of lodging their tax returns. ...Read more
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
How the post-lockdown period will influence property, what the soaring NFT market means, and defining financial wellness
Listen now
APRA’s mortgage crackdown, the power of DeFi and last-minute tax tips
Listen now
Tax refund
PM ponders extension of low and middle income tax offset
Scott Morrison has hinted that a popular tax-saving measure may return in 2022. ...Read more
Tax refund
ATO issues final warning as tax deadline looms
Time is running out for those who are still putting off taking the time to do their taxes. ...Read more
Tax refund
ATO set to improve comms skills after review
Australia’s tax collector has been told to get better at dealing with complaints, appeals and the rights of taxpayers. ...Read more
Tax refund
Late lodgers face fines but aren’t completely out of luck
It usually pays to lodge your taxes on time, but you have a few options if you miss the deadline. ...Read more
Tax refund
Side hustlers should take care when it comes to tax
Both side hustlers and more traditional SMBs need to think ahead when it comes to staying on top of their tax obligations. ...Read more
Tax refund
The ATO is targeting side hustlers: Here’s what you need to know
If you don’t keep on top of what your side hustle means for your tax obligations, you’re asking for trouble. ...Read more
Tax refund
Why your tax return could be better than usual this year
If there was ever a year when it was worth doing your taxes on time, it’s this one. ...Read more
Tax refund
ATO issues tax tips for first-time share and ETF investors
The ATO has offered a helping hand to first-time ETF investors facing the burden of lodging their tax returns. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
