Powerful ATO Data-Matching Tech Puts the Heat on Tax Dodgers

Beware, tax evaders—new ATO data-matching technology is shining the light on undeclared income. Here’s how it’s set to impact Australians.

It’s not a good day to be a tax dodger.

That’s because the Australian Taxation Office (ATO) has introduced new tech that allows it to advance its scrutiny of individuals’ and businesses’ tax and super obligations to ensure compliance.

The introduction of ATO data-matching capability is also assisting the peak tax body in the field of fraud detection.

Here’s a breakdown of what it all means.

ATO Data-Matching Explained

How does the ATO data-matching program work? To begin with, the tax body collects personal and business-related data from the following sources:

• Employers
• Bank and financial institutions (including overseas banks)
• Health insurance funds
• BAS statements
• Superannuation accounts
• Property information from the state

Armed with this data, comparisons are made to the information declared in Australians’ annual tax returns.

The intention of the ATO data-matching program is to identify taxpayers with any omission of income or fraudulent deductions.

The ATO can reassess previous year’s tax returns and has the power to issue fines and penalties, and even interest in some cases, for non-compliance.

ATO Data-Matching to Affect the Gig Economy

The ATO data-matching technology is especially advantageous in ensuring all income from side hustles such as rent collected from Airbnb, Uber earnings, and cryptocurrency trades are declared.

The gig economy is proving to have a serious impact in Australia, as are crypto transactions.

According to Accountants Daily, crypto transactions will face greater scrutiny “than ever before”.

The ATO stated that records relating to somewhere between 500,000 and one million individuals, “who have or may be engaged in buying, selling, or transferring cryptocurrency” will be closely examined by the tax body.

And accountants have been implored to enquire with clients about any crypto transactions as part of their annual tax-time checklist.

“If you don’t ask the question, you may not get the answer because many taxpayers see crypto gains and losses like betting wins and losses, and they are not thinking about it in an income tax context,” CPA Australia Head of External Affairs, Paul Drum, told Accountants Daily.

“So, it is incumbent on advisors to ensure they ask clients and bring to their attention that there is a review going on and they might wish to make a voluntary disclosure before the tax office comes knocking on their door.”

Similarly, tradespeople and sole traders who may have been working ‘off the books’ are now in the ATO’s sights, with plans to check bank accounts and cross reference to any ABNs.

ATO data-matching appears to be here to stay. So, where applicable, it’s worth remembering that it’s not too late to get on the front foot and offer up any relevant “voluntary disclosures” to the tax office before it starts digging around.

Help Is at Hand

Does the ATO data-matching tech raise any questions or concerns for you? Then, get in touch with us today.

At PrimeAdvisory, we’re experts in tax—whether personal or business related—offering trusted advice and tailored strategies that get results.

Reach us on +61 02 9415 1511 or send an email.

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