In 2012/2013, the ATO Compliance Program will focus on:
- income generated by Australians overseas. Irish Bentley currently act for clients hit with tax reassessments exceeding $40M involved in big-ticket items such as ‘Project Wickenby’.
- ramping up domestic Reviews and Audits to detect (and penalise) misleading claims.
The ATO Compliance targets for 2011/12 include:
- Deductions for Work-related Expenses:-
Since 2007 deductions for work-related expenses have increased by 16%.
The ATO has highlighted it will particularly scrutinize the deduction claims of:
- Carpenters and Joiners
- Earthmoving and Plant Operators
- Flight Attendants, and;
- Real Estate Employees.
- Directors, Executives and those on incomes exceeding $1m.:-
The ATO intends to review their closely held assets including charitable trusts and self-managed super funds.
- Small Businesses:-
The ATO plans to continue to target Small Businesses for:
- unreported Cash Income – the ATO will investigate at least 46,000 small businesses are to be investigated for.
- failures in their PAYG obligations.
- superannuation non-compliance, with some 12,500 employers identified as worthy of further investigation, mostly in the following industries:
- Cafes, Restaurants and Bars
- Real Estate businesses
- Carpentry businesses
- IT services and design, particularly PC building businesses
- Accommodation providers
In the Compliance Program Report of 2011/12 the ATO state, “This year we will:
- enhance our tax fraud detection and management
- concentrate on sham contracting arrangements where individuals are incorrectly set up as contractors, instead of as employees of a business
- deliver our GST commitments to the states and territories
- reduce phoenix arrangements through a coordinated program of reviews and audits of directors
- focus on those who fail to report some or all cash transactions to ensure a level playing field
- protect employee rights by ensuring employers are paying the correct amount of superannuation guarantee
- use data matching and risk profiling to identify those who are using non-lodgment or partial lodgment to circumvent their responsibilities
- identify businesses who have received government payments and review those suspected of not correctly reporting income or not meeting their pay as you go withholding and superannuation obligations
- examine businesses operating outside our small business benchmarks
- extend our focus on lodgment compliance within private groups, including wealthy Australians
- continue to deal with the abusive use of tax secrecy havens including Project Wickenby
- strengthen our involvement in multi-agency task forces that target the tax implications of organised crime
- consider tax exploitation schemes and apply promoter penalty legislation
- implement strategies to deal with concerns we have with trustees of self-managed superannuation funds
- regulate self-managed superannuation funds and act against the illegal access or release of superannuation
- engage our very largest taxpayers in cooperative compliance approaches
- examine large business corporate governance processes for managing income and indirect tax risks
- develop strategies to optimise the role of the Tax Practitioners Board, including the referral of tax practitioners who breach their responsibilities
- develop a framework to tailor information, products and services for registered agents that enable us to differentiate and target our approaches
- focus on tax returns or activity statements lodged by unregistered preparers.