In this edition:
- for banking, taxable grants, music royalties
UEarlier this year the ATO flagged its intention to proceed with expanded data-matching and third party reporting activities (as outlined in the Newsletter of May 2014).On 21 August 2014, the ATO gazetted notices announcing that the expanded activities will include the following data-matching programs:
Banking transparency
The ATO will now collect the account details of bank customers from various foreign and domestic-based financial institutions to identify Australian resident taxpayers with offshore bank accounts which may evidence undeclared income and/or gains for the years ended 30 June 2012 to 2015.
The financial institutions listed by the ATO include:
The ATO says that the program will, among other things, help to identify Australian resident taxpayers who may be outside the tax system and increase transparency of the worldwide dealings of Australian resident taxpayers. The program will also be used by the ATO to assist in building an understanding of taxpayer behaviour in international dealings, develop compliance profiles and improve fraud detection models.
The ATO estimates that approximately 50,000 offshore records will be obtained under the program.
Taxable government grants & payments
Furthermore, the ATO will acquire details of entities receiving taxable grants an payments from various Federal, State and Territory and Local Government departments, agencies and authorities.
The ATO says this program will enable it to:
Records matched under the program will exceed 5,000 individuals throughout Australia.
Music royalty payments
Finally, the ATO will also acquire details of entities collecting and distributing music royalty payments for the 2011, 2012 and 2013 financial years from the following sources:
Among other things, the ATO says it aims to detect instances of potential non-compliance, especially with omitted income and alienation of personal services income. The ATO also aims to develop a profile of the industry, including any risks and trends of non-compliance with taxation and superannuation obligations, and tailor educational strategies specifically for participants in the music industry.
It is estimated that records for more than 15,000 entities will be obtained, of which most will be individuals.
Record keeping
This increase in ATO data-matching activity means that clients need to be vigilant in ensuring that all information is complete and correct before tax returns are finalised.
Clients should also understand that the ATO is increasingly sharing information with other government authorities, including the Office of State Revenue and WorkCover, and so care needs to be taken that the correct information is reported at all levels.
ATO Increasing its focus on rental property deductions
The ATO also says it is increasing its focus on rental property deductions. It says common errors made by rental property owners include:
The ATO has also released a series of short videos which explain the tax implications of buying, owning and selling a rental property.
Should you have any questions about the above, or if you are concerned about information provided in past tax returns, you should contact your Goodwin Chivas & Co advisor on (02) 9899-3044.
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