Six ways the ATO uses data to catch tax-dodgers

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Six ways the ATO uses data to catch tax-dodgers

How analytics will nab cheaters.

Tomorrow is the Australian Taxation Office’s official cutoff for 2014-15 personal tax returns. Will you be tempted to tell fibs about your income? How will the tax man ever know?

Take note: it may already know  - or at least can find out - a lot more about your lifestyle and your business dealings than you might realise.

Here are just a handful of the ways the agency is matching different government and non-government data sets to catch the cheats.

Your offshore bank account

The ATO will be the first to admit it has a long way to go before it can stamp out the double Irish Dutch sandwich, but don’t get complacent this means it can’t check an account balance just because it's located overseas.

In 2014-15 the tax office matched its taxpayer records with offshore accounts held with 14 different international banking groups, inclusing the Bank of China, Deutsche Bank, Credit Suisse AG, HSBC and UBS.

The car you drive

If you're cruising the streets in a Lamborghini but lodging a tax return at the minumum wage, expect to attract the auditor's attention.

The ATO’s ‘motor vehicle registries data matching program’ takes in the details of flashy and not-so-flashy cars being registered with state and territory rego agencies to find out who appears to be living above their means - or at least the means they have divulged in their tax return.

The agency will also track income from used car sales. The program includes all registered and transferred vehicles worth more than $10,000.

Your eBay sales

The ATO launched its data-driven crackdown on online sellers earlier this year, announcing it had teamed up with online auction giant eBay to audit between 15,000 and 20,000 merchants who sold more than $10,000 worth of products in 2013-14.

It is also keeping tabs on any major discrepancies between payments made online - via operators from PayPal to Bpay - and the annual income reported by Australian earners.

Your music royalties

As a hardworking aspiring rock star, that royalty cheque is a periodic highlight.

But the tax office is not impressed by strobe lights or guitar solos, and is checking your income declaration against the payments records held by its friends at the Australasian Performing Right Association and the Australasian Mechanical Copyright Owners Society.

Your Australian investment property

The ATO matches all applications made by overseas nationals to the Foreign Investment Review Board between 1 July 2010 and 30 June 2016 against its tax records, to make sure offshore investors are meeting all their obligations related to ownership of Australian residential or agricultural land.

Your share dividends

Traders who have had a good year on the stock exchange might want to think twice about skimping on their capital gains tax obligations.

The ATO is matching transaction data from the ASX, Computershare, Ink Market Services, Advanced Share Registry Services, Boardroom and Security Transfer Registrars against the income reported to the agency.

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