According to a recent article on theage.com, there are three key types of tax returns that may potentially incite an audit from the ATO. Technology is playing a crucial role in this, as there are now more data-matching points than ever before that include electronic payments, banks, governments, assets from employers, and online platforms to fuel their analysis and scrutiny.

The Most Common Triggers for an ATO Audit

  • Poor record of submitting your tax returns on time
  • Over-claiming tax deductibles
  • International funds transfers

Some of the most likely targets for ATO Audits are outlined below.

False Laundry Claims

While this might seem like an insignificant area of concern, a total of 6 million people in Australia submitted claims for clothing and laundry expenses that totalled $1.5 billion. The ATOs logic is that it is highly unlikely that almost half of the population need to wear a uniform for work. Although there is no requirement at present to prove this expense, the ATO intends to scrutinise future claims, and they actually have the ability to ask your employer if you are required to wear a uniform for work!

Property Investors

At ATO is planning on doubling the number of audits in this sector going forward. They will also be using information taken directly from online booking platforms, rental bonds, and financial institutions to help them on their quest. Once an auditor is at work, they can search for utilities and social media in order to determine a person’s eligibility.

Even letting a room out temporarily must be declared. Renting out space in your home is not a hobby; it is a form of income that should be declared.

Cryptocurrency Traders

With the rapid growth in the online cryptocurrency world and the reputation this sector has for being part of the ‘black economy,’ more work is being done to scrutinise money that is trying to be hidden. As part of a data-matching program, the ATO is harnessing data from a range of sources, such as cryptocurrency service providers in order to make sure people are paying the right amount of tax on their investments.

With significant leaps in the availability of data due to advances in technology, there are few places people are able to avoid paying taxes. While the ATO is there to help people get the right deductions, there is a growing team of enforcement officers set to be carrying out more scrutiny in the years ahead.