ATO’s Compliance Program for the 2009-2010 Year

The Tax Office has released its annual compliance program for the coming 2010 year.  The purpose of this is for the Tax Office to outline the continuing areas that the ATO will focus on, as well as additional areas of “interest” to the Tax Office that will be given specific attention.

Given the current global economic issues, the Tax Office will be even more diligent in protecting the tax collections for the Federal Government, and to this end, the Tax Office has listed a number of areas of focus, including:

1. Continued data matching processes

  • Typically, the Tax Office is provided financial information from the banks, share registries and other financial institutions on interest, dividends, trust distributions and other forms of income derived from these financial institutions.
  • The Tax Office will continue to match these records against what taxpayers disclose in their tax returns, and where there is a discrepancy, a letter will be quickly dispatched by the Tax Office for an explanation
  • The Tax Office will also look at the recording of capital gains and losses by taxpayers, based on data it is given from share and unit registries on investment movements of a taxpayer, and data it is provided on property disposals.
  • For the 2010 season, the Tax Office intends to expand this data matching to include employee share schemes, health insurance policies that don’t provide sufficient private patient hospital cover, and eligibility for tax offsets and the Medicare levy exemption.

2. For the 2010 year, the Tax Office will increase significantly its testing of Self Managed Superannuation Funds‘ compliance with the various superannuation legislation. This includes ensuring trustees are fully aware of the fund’s requirements in the areas of the in-house assets rules, and where the Tax Office identifies breaches, the trustees may find that they have to engage in reverse workflows with the Tax Office over the subject. Also, that the superannuation funds are not involved in any schemes, such as accessing superannuation benefits before the members are permitted under the law.

3. Refund Fraud. Based on the current economic conditions, the Tax Office is acutely aware there are some in the community that will either look to “boost” their various tax refunds by claiming for expenditure not incurred, or inflated. Further, the Tax Office is aware of a rise in taxpayer identity theft, where a taxpayer’s details have been “stolen” and fraudulent claims are made.

4. Wealthy Individuals. As outlined in the last newsletter, the Federal Government has indicated it wants greater focus on ensuring wealthy individuals and wealthy families are paying their fair share of tax. The 2010 compliance program indicates the Tax Office is extending its compliance activities to more closely examine the tax affairs of individuals with a net wealth in the area of $5million to $30million.


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