Data Matching to be Expanded to Individual Tax Returns

The ATO has advised that last year, it cross- referenced information reported in tax returns against over 600 million transactions provided to it by third parties to identify omitted income and gains, or incorrectly-claimed offsets or entitlements to exemption from surcharges.

It contacted nearly 400,000 taxpayers who had apparent discrepancies in the information they reported in their tax returns.

The majority of taxpayers who made errors on their return and had to repay money didn’t wait for the pre-fill information to be available. Nine out of ten returns were adjusted as a result of its inquiries.

The ATO said that traditionally, it focused on areas such as omitted interest and employment income.

However it is expanding its data matching to encompass a greater range of areas, such as:

  • Capital gains tax from the disposal of shares and property;
  • Employment related foreign source income; and
  • Contractor income from payments made by government agencies.

The ATO also warns tax agents that if their client wants to lodge before all pre-filling information is available, ask them for details of income from multiple jobs, foreign income, bank interest and Government payments they received.

Ref: ATO website – Prepare and lodge – Data matching