The Australian Tax Office (ATO) has announced it's on a mission to scrutinise every Australian tax return as part of an ongoing focus on closing tax gaps. And yes, that includes those tiny exaggerations in your work expense claims. Here's what you need to know.
The Australian Taxation Office (ATO) has revealed the dodgiest claims taxpayers have made during the last financial year. The claims include Lego, child support and a wedding reception. ATO assistant commissioner Karen Foat said when people deliberately make dishonest claims, particularly for large sums, it could impose a penalty.
The ATO's Assistant Commissioner Karen Foat is warning Australians to fess up about their exaggerated tax returns to avoid getting in trouble as the agency ramps up its investigations to curb tax evasion.
"Each year the ATO contacts around two million people about their returns. In most cases, audits are not our first action," Assistant Commissioner Karen Foat said in a media release.
"Third party data indicating under reported income, and deductions that appear high compared to people with a similar job and income level, tend to raise concerns.
"A small amount of over-claiming by a large number of people adds up to $8.7 billion dollars less each year for essential services, we can't turn a blind eye to that."
Oh no, what happens if I'm audited?
If you're audited, you'll have to go through the process of providing explanations and proof for any deductions you've made in your tax return. All that money you claimed for using your phone at work? Yeah, you're going to need to show the receipts.
"We are just looking for an explanation and documentation on a deduction," Foat said.
"For example, if you've claimed deductions for clothing but you work in a job where a compulsory uniform is unlikely – we may just want to know a little more about why you’ve claimed that deduction."
But if your tax exaggerations are a bit more serious, you might have a tougher time explaining it to the ATO in order to avoid further punishment.
"We see behaviours ranging from genuine mistakes through to deliberate over claiming. In the most extreme cases of intentional fraud we may seek to prosecute through the courts," Foat said.
I think I made a mistake, how do I fix it?
If you know you've made a tiny error but haven't yet been audited, you can jump on MyGov, head to the ATO portal and amend any mistakes on myTax. If it's too late and the tax man has come knocking, the best thing you can do is just tell the truth.
"If the ATO has been in contact to review your claims and you know you've over-claimed, it is important to be honest and get the matter resolved quickly. Taxpayers are more likely to face penalties if they aren't honest with us once we come knocking," Ms Foat said.
Remember, while we all like to think a little bit of tax evasion is a classic Australian pastime, it's one that also comes with serious consequences.
It's 2019 and rather than wasting hours of your day lining up at a government office to do some life admin, you can sort everything out online. But while I've been linked up to a MyGov account for a few years now (responsible adult brag), it seems not everyone's cottoned on to the idea.