26 March 2013 Taxpayers face ATO “data-matching” crackdown

The Australian Tax office will use new data-matching technology to closely scrutinise residential and commercial property sales to ensure taxpayers paid the correct amount of tax.

Around 10.4 million taxpayers will face scrutiny over their property dealings with the ATO’s high tech computer systems gathering real property transaction details from state revenue offices and relevant state government land and property departments.

The ATO will be keen to get maximum value out of the data-matching technology, which cost $800 million to implement over a seven year period.

"No one should underestimate the sheer volume of data the ATO now collects and with the ever-increasing sophistication of techniques to analyse and 'slice-and-dice' that data, the tax affairs of Australians will come under closer scrutiny," wrote tax writer Terry Hayes in January.

Last year the technology was used to match more than 649 million transactions, the Australian Financial Review reported.

The ATO will be assisted in efforts by the banks, including all the major banks and banks that service the wealthy investor market like Deutsche Bank and HSBC.

The ATO will be looking for offshore bank accounts, which may show that may show property and other hidden income for the 2009, 2010 and 2011 tax years.

“Our traditional sources of data include investment income information from banks, financial institutions and investment bodies, employment information and welfare payments. “We obtain data from banks that identifies credit and debit card sales made by Australian businesses. This data is matched against taxpayer records to identify those people deliberately under-reporting or omitting income,” said the ATO.

In September last the ATO provided some insights into the scope of its data-matching capabilities:
“We match this data with our own information to detect those who may not be correctly disclosing all of their income.“We also undertake large scale activities involving information exchange with other government agencies.“We also have an agreement with Medicare Australia who provide data to enable us to administer the 30% health insurance incentives rebate, and have online access to information held by the Australian Securities & Investment Commission (ASIC) and banking transactions captured by AUSTRAC.

Property investors with links to the horse racing industry were placed on particular notice: “As well we undertake data matching projects relating to particular risks, issues or industries. For example, these could include scrutiny of property sales to detect capital gains issues or payments made to those involved in the horse racing industry,” said the ATO as part of the same statement.

The tax office will also target around 21,000 contractors who provide services to local councils using its data-matching technology to collect relevant information from local government authorities in Queensland, NSW, Victoria and Tasmania.

The ATO will also check the around 1.8 million records from Centrelink and Veterans’ Affairs, to confirm claims for dependant tax offsets made by people who received tax-free pensions or benefits in the 2011 or 2012 income years.

Reproduced in full with permission: Property Observer Taxpayers face ATO “data-matching” crackdown over residential and commercial property sales 26 March 2013

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