Latest ATO statistics showed 3.86 million Australians have lodged their 2019/20 tax returns and more than $6.3 billion has been refunded.
Latest ATO statistics showed 3.86 million Australians have lodged their 2019/20 tax returns and more than $6.3 billion has been refunded.

How ATO is catching tax cheats

EXCLUSIVE: Ringing up employers and businesses, doing simple Google map searches and checking receipts are not falsified are some of the simple ways the taxman is catching out cheats.

For those trying to do the dodgy the ATO has warned they are on high alert.

The Australian Taxation Office's assistant commissioner Karen Foat said they had advanced data matching technology that can catch people out but cheats could sometimes be caught through the simplest of checks.

"If people are claiming large things compared to people in similar jobs and on similar incomes then that's something we might want to dig a little further on," Ms Foat told News Corp Australia said.

"People often overstate the distance of a trip but it's pretty easy for our auditors to put in location A and location B into something like Google maps to see how far a trip really is so it's unwise to state the distance of the trip where we know the location."

Ms Foat said it's easy for them to calculate real actual distances travelled from home to work - addresses auditors could easily obtain.

Latest ATO statistics showed 3.86 million Australians have lodged their 2019/20 tax returns and more than $6.3 billion has been refunded.

The average refund is $2395.

ATO assistant commissioner Karen Foat
ATO assistant commissioner Karen Foat

BDO's tax partner Mark Molesworth said the tax auditors work around the clock to ensure claims are legitimate.

"You should always assume that the tax office may come and check particularly if you are making large work-related claims," Mr Molesworth said.

"They will contact the people you said you paid money to or the places you said you stayed to check that you actually did."

He said Australians "should assume the tax office is going to check your claim and make sure if you did claim something you did actually spend the money".

"Always make sure you've recorded the expense and you've got the documents to prove it and it's related to your work," he said.

 

The ATO is catching out tax cheats through simple ways such as Google searches and contacting employers.
The ATO is catching out tax cheats through simple ways such as Google searches and contacting employers.

"They may also ring your employer and asked if they actually reimbursed your costs, if your employer has reimbursed you that means you can't claim a tax deduction for that cost."

Ms Foat said also lying on log books was an easy way to detect cheating - for instance marrying up the information with public holidays and annual leave when the customer was not working.

Ms Foat said auditors could even contact employers to check claims made by employees.

In one case a chef was caught out by claiming work uniforms, laundry and travel for work but when the ATO contacted his employer they found his uniform was supplied and he did not travel at all for work.

They have also seen people claiming claims for study for courses that don't exist.

 

CATCHING TAX CHEATS

Checking distances travelled using Google maps.

Contacting employers to an employee's check work expenses.

Phoning up charities to check donations were made.

Comparing fake invoices with the genuine supplier to catch out errors.

Check actual locations exist - for example: hotels, businesses.

sophie.elsworth@news.com.au

@sophieelsworth

 

Originally published as How ATO is catching tax cheats

BDO tax partner Mark Molesworth
BDO tax partner Mark Molesworth

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