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The tax man is after wealthy investors

If you’re an investor, wealthy, an executive or operate in the cash economy, the taxman is watching you according to an article in the Sydney Morning Herald.

Using its vast data-matching abilities, the Australian Taxation Office is becoming increasingly sophisticated in its methods of targeting taxpayers, particularly those using non-lodgment or partial lodgment to circumvent their responsibilities.

And for the rich, the ATO’s second commissioner, Bruce Quigley, says the ATO is building a profile of the lifestyles of the rich, to see if it matches what they declare in their income tax returns.

The ATO will conduct about 380 reviews of people worth more than $30 million for the 2011-12 financial year, resulting in 60 full tax audits for the ”highly wealthy”.

According to the article in the SMH, at the other end of the spectrum, the ATO’s data-matching technology will target dole cheats by cross-checking on a daily basis people with outstanding debts.

The A.T.O’S sophisticated systems have the power to automatically cross-check millions of pieces of data to identify omissions or errors in what you’ve reported.

This includes data on employment, welfare and investment income, health insurance coverage, property and share ownership and disposal, employee share scheme information, significant cash transactions and other indicators of wealth, such as luxury cars, flash boats, big houses, trust and unit trust distributions.

The is used to help the ATO identify taxpayers whose expenditure is more than their reported income and businesses that are potentially skimming some or all of their cash takings.

In the past year the ATO matched more than 500 million transactions received from third parties with information in tax returns.

Over the past four years, the ATO has reviewed the affairs of a high-risk group of more than 2,000 highly paid people. This year the ATO will be cracking down on coffee shops, earth-mover operators, flight attendants, plasterers, real estate agents, churches, carpenters and joiners.

The ATO will also pay particular attention to deductions for work-related expenses this year.



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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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