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5m Aussies on ATO’s new watch list
Just one day out from the income tax lodgement deadline, the ATO announced it has put 5 million Australians on a priority list as part of a monitoring program for share transactions.
5m Aussies on ATO’s new watch list
Just one day out from the income tax lodgement deadline, the ATO announced it has put 5 million Australians on a priority list as part of a monitoring program for share transactions.
The ATO now holds more than 500 million records of share data, and will prioritise share transactions under its data matching program.
In an extension to its data matching program, the Tax Office will now scrutinise share data from ASIC and compare it to information reported in tax returns and other ATO records.
“The data includes details of the price, quantity and time of individual trades dating back to 2014, with more than 500 million records obtained. The information complements information that the ATO already holds from brokers, share registries and exchanges,” said ATO assistant commissioner Kath Anderson.
“We will use the information to identify taxpayers who have not properly reported the sale or transfer of shares as income or capital gains in their income tax returns. Having access to increased data will help us to protect honest taxpayers, by detecting those who have not done the right thing. This helps ensure a level playing field for all.”
Ms Anderson said share transactions are high on the ATO’s priority list given more than 5 million Australian adults now own shares.
“Almost one-third of all Australian adults own shares, and there is evidence that some taxpayers are getting it wrong when it comes to reporting their capital gains or losses from the sale of shares,” she said.
“In particular, we tend to see higher rates of error among those who don’t regularly trade in shares and who are not aware of the tax implications.”
The ATO will look to make the share data information available to taxpayers as part of the tax return pre-fill service in the future.
With the tax lodgment deadline tomorrow for self-prepared returns or for taxpayers to be a client of a registered tax agent, Ms Anderson says taxpayers or tax agents who realise they have made an error or left out their gains should not panic.
Taxpayers contacted by the ATO will be given the opportunity to verify information collected from data providers before any compliance action is undertaken and will be given at least 28 days to clarify any information obtained.
“If you realise you made a mistake, contact the ATO as soon as possible,” said Ms Anderson.
“Penalties may be significantly reduced in circumstances where you contact us prior to an audit. If you choose not to, you should be aware that penalties can be as high as 75 per cent of the tax shortfall.”
According to the ATO, taxpayers who engage in share transactions should keep good records of share purchase and sale process, as well as costs like brokerage fees; and ensure they declare capital gain in their tax return.
For more on what the Tax Office is targeting this tax time, click here.
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