Deputy commissioner from the Australian Tax Office (ATO) Will Day said a new bulk record data matching service provider will make up a key element in the ATO’s compliance program.
“The ATO uses third-party data to improve the integrity of the tax system by identifying taxpayers who fail to disclose their income details correctly. We also use third-party data to assist taxpayers in meeting their tax obligations through pre-filling of tax returns,” said Mr Day.
Following the use of data matching, businesses and individual taxpayers will be given the opportunity to verify the information collected within 28 days. Taxpayers can correct a mistake by requesting a self-amendment or making a voluntary disclosure. The ATO recommends that taxpayers contact them prior to an audit being conducted.
“We want to help taxpayers to get it right and ensure they are paying the correct amount of tax,” Mr Day said.
“Where people find that they have made an error or omission in their tax return, they should contact the ATO as soon as possible. Penalties may be significantly reduced in circumstances where we are contacted prior to an audit,” said Mr Day.
The ATO new tool is in conjunction with other regulators, in particular the Australian Transaction Report and Analysis Centre and the Australian Securities and Investment Commission, as part of a joint strategy that tax law requirements align with a whole-of-system approach.
Cryptocurrency has been on the ATO’s radar since it exploded in popularity in recent years. You can read more about the tax treatment of cryptocurrency, and how you can stay out of hot water, here.