Thought about not including that amount of interest you earned from your savings account in your tax return? Think again the ATO have extensive data matching programs.

In the recent federal budget the ATO has received $78 million dollars to help it with its data matching programs. The budget papers state that the money will be allocated to focus on the areas of:

• taxable government grants and other government payments;
• managed investment trust and partnership distributions, company dividend and interest payments;
• transactions reported to the Tax Office by the Australian Transaction Reports and Analysis Centre.
• sales through merchant debit and credit services; and
• sales of real property, shares and managed funds;

In a recent media release (2013/50) the ATO noted that:

“More than 640 million transactions are reported to us annually from sources such as banks, share registries, employers, merchants, states and territories and other government departments.

We use this to pre-fill returns and detect people trying to avoid their tax and superannuation obligations.

In the last financial year, we used our data and information matching to raise $947 million in revenue adjustments from some 445,000 reviews and audits.”

The ATO collects information from various sources including:

• banks, financial institutions and investment bodies – investment income
• employers – payments to employees and contractors
• state and territory motor vehicle registering bodies – motor vehicles sold, transferred or newly registered
• state and territory title registration bodies – sales and other transfers of real property
• other government bodies – pensions, benefits and other payments, for example, those made under the Home Insulation Program
• websites such as eBay – people making substantial sales
• stock exchanges and share registries – share transactions
• businesses in the building and construction industry – payments made for building and construction services (from 1 July 2012).

Using this approach, last year the ATO contacted over 500,000 taxpayers who had apparent discrepancies in the information they reported in their tax returns. Nine out of ten returns were amended as a result of our enquiries.

DISCLAIMER: All information provided in this article is of a general nature only and is not personal financial, taxation or investment advice. It does not take into account your particular objectives and circumstances. No person should act on the basis of this information without first obtaining and following the advice of a suitably qualified professional advisor. To the fullest extent permitted by law, no person involved in producing, distributing or providing the information in this article (including Award Accounting for Business Success Pty Ltd, each of its directors and employees) will be liable in any way for any loss or damage suffered by any person through the use of or access to this information.