Tax time 2017: ATO ‘hit list’ revealed

The Australian Tax Office has disclosed a “hit list” of taxpayers it will pay special attention to as the end of the financial year looms. The main focus of the office involves dodgy deductions as well as manipulated numbers and failure to disclose income.

Director of tax communications with H&R Block Mark Chapman said that people who get extra income through sharing economy platforms can expect special attention this time around. Those in the sharing economy, such as those who are renting an Airbnb or driving an Uber, have tax responsibilities.

“Creative” accountants will also be in the crosshairs. They are the ones who inflate work-related personal tax deductions for their clients, working holiday-makers claiming to be residents and investment properties-related cuts.

People who do not comply are identified by matching the data they obtain with tax returns. According to Chapman, thousands of people already received letters from the ATO, which will ramp up at tax time.

Tax time 2017

Chapman said that being audited occurs in a minority of cases. Those who claimed dodgy work-related expenses must watch out this coming tax time. It is not all bad news, as some people can also claim tax deductions. Chapman revealed the ATO was getting financial information of taxpayers from third parties like banks or the sharing platforms themselves.

Assistant Commissioner Kath Anderson shared that the ATO was utilising real-time data in comparing taxpayers with others in similar occupations and salary brackets. Thus, it can spot higher-than-expected claims related to expenses which include internet, mobile phone, vehicle, travel and self-education. Deductions for work uniforms are a common trap for workers. For one to be able to legitimately claim his uniform, it has to be distinctive and unique, like displaying the employer’s logo, according to Anderson.

There were three “golden rules” for deductions for every return scrutinised, news.com.au reports. One rule is the taxpayer must have spent the money, which shouldn't have been reimbursed. Claim is directly related to earning the income as well, and there should be a record to prove it.

Seven News has published ATO’s hit list. Here’s what Aussies probably cannot claim this year: travel between home and work, car expenses that have been salary sacrificed, meal expenses for travel, private travel or transport, daily clothes to wear to work even if they were required by employers, higher education contributions, self-education expenses if the study is not related with the role and private phone or internet use.

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