ATO Data Matching and Tax Evasion

Does ATO data matching actually work or is it all mostly bluff to scare people into declaring everything ?

I declare everything so have nothing to worry about but I know someone who has not declared any property income on a place rented out for over 10 years through a real estate agent, the property has no debt. So far they have gotten away with it & their plan is to move back into the property for a few years then sell it capital gains tax free, which I am sure they will get away with as well since the property was never declared as an investment property. So I do not have much faith in the ability of the ATO to detect evasion of this sort.
 
Ato data matching is very good. Seen it work first hand.

This one is hard to detect during the rental phase as agents arent required to report data to the ato but easy to detect on sale.

property sold and data comes in from land titles office showing a property sold. Data also coming in from service providers or even his own return showing a different main residence. Data is matched and questionnaire sent out asking why he didnt report a capital gain.

from then on let the games begin. Penalties 75% percent for intentional disregard plus 20% uplift penalty making it 95% plus interest going back 10 years. Also conspiracy to defraud the commonwealth. Is he taking bending and stretching sessions. Might recommend to him a good yoga instructor.
 
I've been to court with the ATO, I've a thread about it in the Coffee Lounge section if you want more details.

They didnt do any data matching with me, but I think they can only go back a certain duration. They had to take it on faith the amount of time i lived in my property. They accepted a letter from my mum to say the date i moved out of parents house into the property and a letter from my housemate to say I was still present when he moved back out again.

I've heard stories about them verifying whether you took an international flight that you said you took, and stuff like that. Not sure whether its true.
 
Dave

yes yours was interesting and you were entitled to the exemption. I think in this case the friend isnt entitled to an exemption.
 
Ato data matching is very good. Seen it work first hand.

This one is hard to detect during the rental phase as agents arent required to report data to the ato but easy to detect on sale.

property sold and data comes in from land titles office showing a property sold. Data also coming in from service providers or even his own return showing a different main residence. Data is matched and questionnaire sent out asking why he didnt report a capital gain.

from then on let the games begin. Penalties 75% percent for intentional disregard plus 20% uplift penalty making it 95% plus interest going back 10 years. Also conspiracy to defraud the commonwealth. Is he taking bending and stretching sessions. Might recommend to him a good yoga instructor.

My lord this post made me laugh!
 
When i worked as a removalist,i had numerous requests from the ATO and Revenue SA about peoples moving dates etc.
 
Data cross matching has netted the ATO billions.

At one point they were obtaining access to state government vehicle ownership databases and crossmatching luxury cars (even old ones) with peoples incomes.

"So you own a 3 year old Jag and only earn $20,000 a year - please explain."

A programmer friend worked on their monitoring of ATM transactions. People who had large sums of money safely banked in Switzerland or Singapore and were living off their credit cards found themselves in the gunsights of the ATO

Anyone else have any stories to share?
 
So if agents never provide info to ato and they don't sell until living back in the property then they'll probably get away with it. They have been non resident for over 12 years so will just say the property was empty in the unlikely event they were ever asked.
 
A lot of taxes are evaded. The black economy is worth billions. The GST was suppose to attack th black economy - what a joke. No amount of law enforcement can eliminate tax evasion. Most data matching is labour intensive and futile. Bank Interest earned is the exception.

How many times has the ATO stated they they're going after high wealth individuals and yet very few are prosecuted. Much easier for them to go after teachers who claim a set of text books....oohh...they're part of a set, you can't claim the lot , over $300...naughty naughty.
 
I've heard stories about them verifying whether you took an international flight that you said you took, and stuff like that. Not sure whether its true.

Department of Immigration and Citizenship checks reveal flight numbers etc. Surely that's easy work for the ATO if they get interested and I'd bet my fishing reels that they have a memorandum of understanding.
 
Yep, Ive just been hauled over the coals by them.

They sent me a very friendly letter basically stating:

"Dear Mr Blacky
For the last 3 years you have declared $0 income, however, please see the attached list of transactions you have received into your bank account since the 1 July 2009. Based on this information we have assessed your income for the previous three years to be $xxx bazillion and have therefore re-calculated your income tax for the 3 periods to be $xx Bazillion. You have until the 21 May (3 weeks from today) to respond or the above calculation will stand. If you fail to respond interest and penalties in addition to the above amounts may also be payable by you.

Yours with great love.
Mr Tax Man"

My accountant duly contacted him by phone and discussed the reasons for the non-residency status, and the reason the amounts were not declared. Mr Tax Man asked for additional information including dates I was in Australia for the period. Something which I would struggle to provide accurately without a great deal of time/effort. My account called him back to see how important this was and he responded "given that from what you are saying your client appears to be correct (i.e.non resident) I will advise you that I have his entry and departure dates here already - I will forward them to you".

So basically the ATO could tell me my bank transfers in, and my dates into/out of the country, without even trying. God knows what else they had (hopefully none of THE photos :p)

My advice, careful where you tread. Big brother has his eye on you...

Blacky
 
Mr Tax Man asked for additional information including dates I was in Australia for the period. Something which I would struggle to provide accurately without a great deal of time/effort.

Your current and previous passports would have this information?
 
So basically the ATO could tell me my bank transfers in, and my dates into/out of the country, without even trying. God knows what else they had (hopefully none of THE photos :p)

Blacky, are you a non resident for tax purposes? It's strange the ATO are asking for the dates you were in/out of Oz when they can access this info easily. I think they have a lot of powers but I don't give them too much credit for ingenuity. Oh yeah, I upload THOSE pics and vids to the cloud and get them off my camera.. customs always ask to see my holiday snaps :confused: :p
 
Blacky, are you a non resident for tax purposes? It's strange the ATO are asking for the dates you were in/out of Oz when they can access this info easily. I think they have a lot of powers but I don't give them too much credit for ingenuity. Oh yeah, I upload THOSE pics and vids to the cloud and get them off my camera.. customs always ask to see my holiday snaps :confused: :p

A few long trips overseas and non-filing does not make you a non-resident.

If you have ever been a resident, then even minor and infrequent visits to Australia can maintain your residence under common law depending on the circumstances.

Then it is down to any double tax agreement if you also have tax residency of another country.

Data sharing agreements with other countries are another powerful resource.
 
Back
Top