Enhanced data matching powers for ATO
You only need to look at the recent Treasury consultation paper, Improving tax compliance enhanced third party reporting, pre-filling and data matching, to see where the ATO will be focussing its efforts in coming years. The paper explores the creation of a new third party reporting system for:
- Sales of real property and transfers executed in all States and Territories.
- Sales of private company shares and units in unit trusts – initially applying to transactions for shares in listed companies the paper contemplates the possibility of sales of 'private company' shares being brought into the reporting regime
- Sales made through merchant debit and credit services; and
- Taxable government grants and other payments.
The proposal will involve legislating changes similar to the annual payment reporting rules that are now in place for the building and construction industry. This proposal represents an important change in the compliance framework that businesses operate under.
Also out this month was the Inspector General of Taxation's reports into Review into the Australian Taxation Office's compliance approach to individual taxpayers – use of data matching and Review into aspects of the Australian Taxation Office's use of compliance risk assessment tools.
The Inspector General reviews how the ATO uses data matching and the reasonableness and efficiency of the data matching programs. The sheer volume of data collected now and sought to be collected, and the time taken to review anomalies is an issue.
An example is the property sales data collected form State and Territory Governments. In 2012 alone, the ATO identified 1.4 million potential anomalies in the information declared on income tax returns against property sales data where the property did not appear to be the primary residence. From those anomalies, there were 2,860 completed cases.
There are many potentialities where the data matching exercises may trigger an audit. It's advisable to have audit insurance in place for this very reason, given that an audit can put your business under considerable scrutiny and strain while incurring professional costs to defend the audit. Download our Audit Insurance factsheet for more information.
For more information about record keeping or audit insurance, please contact us on 02 9957 4033 or via our contact form.
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Last updated March 2014. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.