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Posted: 18 Jan 2008
The Tax Office has announced that they are stepping up audit activity and the main areas to be targeted are listed below:-
1. Income matching audits
Every year the Tax Office conducts computerised cross matching of taxpayer’s tax returns to ensure income earned has been included in tax returns.
The income information is cross matched with banks, Centrelink, company share registers, state titles offices and employers PAYG payment summaries (group certificates).
2. Rental property owners
The Tax Office are looking at rental property owners’ tax returns this tax year with a particular emphasis on claims for repairs, interest, borrowing expenses, depreciation and capital allowances. The common errors they have found include:
• Claiming initial improvements to the property as repairs.
• Claiming expenses where a property is not available for rent.
• Deductions not being apportioned when
non-commercial rents are being charged to relatives or friends.
• Estimating the construction costs of buildings rather than relying on cost estimates provided by quantity surveyors.
• Interest being claimed on loans that are partly or wholly for private use.
3. Not declaring capital gains on disposal of shares or property
The Tax Office continues to compare lodged tax returns with share trading and rental property sales data. The ATO obtains this information from share registries and state titles offices.
Furthermore the Tax Office will be paying particular focus to the following occupations for
work-related expenses:
• Tourism, travel consultants and tour guides
• Fitness and sporting industry employees
• Construction tradespeople who are employees
• Guards and security employees, and
• Mining site employees.
According to Tax Commissioner Mr D’Ascenzo “In particular, we’ll be looking for capital gains from assets sold to contribute to superannuation before the new super changes came into affect on 1 July.”
Providing original documentation for the preparation of your tax return can ensure accuracy.
For further information call Tas Demos on 0298693300.
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