The ATO are fairly up front. Every year they tell you what they are targeting and why. That’s why when the Tax Commissioner released his compliance program for 2010/2011, we took a keen interest in what he had to say.

The way the tax office catch tax evasion is more sophisticated and far reaching than ever. Last year, they utilised over 500 million transaction records from third parties. That is, bank details, international transactions, investments, welfare data, super fund information, luxury car and boat purchases, employee share scheme details, property data, are all used to make sure that the income you declare on your tax return is an honest assessment.

Individuals

• Details of employee share schemes
• Executive salaries and access to executive perks
• Lifestyles that don’t match income declared
• Claims for home office expenses
• Claims for business travel (particularly mistaken claims for travel between the office and home).

Investors

• Claims for rental and share investment expenses not entitled to or can’t be substantiated
• Breach of superannuation caps

Business

• International transactions – Project Wikenby is credited with reducing the flow of cash to international tax havens – Vanuatu, Switzerland, Lichtenstein – between 20 to 30%!
• Transfer pricing issues
• High level of GST credits