How to get your tax return right as Australian Taxation Office technology traps cheats

Jul 26, 2020

Dodgy deductions on your tax return are increasingly likely to get caught by the Australian Taxation Office.

Millions of tax refunds this year will include extra working-from-home deductions, but legal and accounting specialists warn the ATO’s eagle eyes are now scanning hundreds of millions of transactions.

Many transactions today are online, so mistakes are more easily spotted.

ATO assistant commissioner Karen Foat said private expenses were not deductible, but that had not stopped people trying to claim for gastric-band surgery, a man paying his wife $1000 a week for housework and deductions for a child’s first birthday party.

The ATO’s systems compare your tax return with information from employers, banks, government departments and businesses, and it contacts two million people each year about questionable claims. “Penalties can range from 25 per cent to 75 per cent of the tax shortfall, but you have also got to repay the tax plus interest,” Ms Foat said.

“If we think you have been doing this deliberately and falsifying documents, there can be prosecutions.”

NDA Law tax specialist Lisa Christo said the ATO’s data analytics matched more than 600 million transactions annually.

“So if you have been trying to avoid tax, the risks of getting caught this year or in the future are significant,” she said.

“My advice is if you don’t have a tax agent, it is really much better to take your time when completing a tax return.

“You generally need to keep all your tax records for five years.”

Chartered accountant and Mr Taxman founder Adrian Raftery said the ATO usually clawed back more than $1bn annually through audit investigations.


Not keeping records – it’s the No 1 reason why the ATO rejects tax claims.

Forgetting extra income such as bank interest, freelance work and Airbnb rentals.

Incorrect apportioning of home office expenses between work and private use.

Claiming for travel between home and work.

Choosing easy deduction methods when a bigger refund can be claimed through logbooks.

Doing DIY tax without understanding deductions.

Original article published here on 26 July 2020 in the Geelong Advertiser. 

comments-rhsLatest Comments

  • "Assuming the app calculates the profit currently then you can use that figure in the Business Income item of your individual tax return - ideally the ATO would like a gross up of the turnover/sales..."

    By: Mr Taxman at Oct 17, 2020 2:10AM

    Post: Foreign currency trading

  • "Good evening Mr Taxman, I just would like to ask about my forex currency trading(I use MT4 app) Each time I close a trade it shows me a loss or profit and it includes the costs. At the end of..."

    By: Aggi at Oct 06, 2020 11:19AM

    Post: Foreign currency trading

  • "I think the Tax Commissioner would unfortunately consider it to be a personal expense Anne - like the purchase of a house would be."

    By: Mr Taxman at Sep 19, 2020 12:35AM

    Post: Claiming car expenses

  • "You can claim the 68 cents per kilometre method but that effectively covers all running costs of your vehicle. If you wanted to claim a % of running costs you will need to keep a 12 week logbook. "

    By: Mr Taxman at Sep 19, 2020 12:32AM

    Post: Claiming car expenses

  • "Its ok to choose from November 2019 for the start of your logbook Liezl. You can essentially chose any 12 week period during the year so long as its representative of your travel throughout the..."

    By: Mr Taxman at Sep 19, 2020 12:29AM

    Post: Claiming car expenses