Tax office blocks 22,000 returns

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Tax office blocks 22,000 returns

Risk models flag potentially fraudulent claims.

Data matching models at the Australian Taxation Office have flagged almost five percent of this year’s income tax returns as potentially fraudulent.

Since 1 July, the agency has finalised 460,000 returns from the 2010-11 financial year, issuing a total of 419,000 refunds worth $1.03 billion as of Wednesday.

It blocked 22,000 returns, worth $85.38 million and including 692 from the 2009-10 financial year, that were identified by risk models as potentially fraudulent or overstated.

A spokesman for the tax office explained that tax returns were assessed by its Income Tax Return Integrity program before being finalised.

The program incorporated data mining, data matching approaches and the "assessment of indicators of known fraudulent behaviour".

The tax office reported having received 1,286,000 income tax returns for the new year, of which almost half were lodged electronically.

Commissioner Michael D’Ascenzo reported this week that use of its online tax return software, e-tax, had increased 4.29 percent on last year.

He said processing was on track to meet the tax office’s service standards of processing 94 percent of individual electronic returns within 14 days.

However, some returns would take longer to finalise if, for example, the tax office required more information from other agencies, or the claimant had forgotten to include details.

The tax office failed to meet its 14-day target for almost one in four returns last year, as it “smoothed out” processes following the implementation of its $757 million Change Program.

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