The ATO can, and will, check your bank accounts, cross reference payments against an ABN and confirm missing income from your tax return.
On your tax return, including all capital gains events
If you didn't declare the sale of shares or rental property on your tax return, the ATO might flag your return for a review. Data matching with other government agencies and financial institutions is possible because of ATO's sophisticated technology.
Taxation forms
Not only do we collect personal information from an individual's tax returns, we also collect information about individuals associated with partnerships, trusts and companies when those organisations lodge returns.
If you are in debt to the ATO, you may be issued with a garnishee notice on your bank accounts with a demand to pay the ATO within a specified amount of time. Failure to do so can result in your bank accounts being frozen and a suspension on your trading accounts.
Impose a freezing order – for example, on your bank accounts. That is, without notice the ATO can freeze and then if required strip your accounts, particularly where they believe you have alternative sources of income. This freezing order cannot be initiated by the ATO but must be granted by a court.
You must submit a TTR to AUSTRAC for each individual cash transaction of A$10,000 or more.
two years for most individuals and small businesses. two years for most medium businesses (see note 2) four years for all other taxpayers (see note 3).
This includes cash deposits of 10,000 Australian dollars or more that you placed into your bank accounts in Australia or other financial institutions in Australia. When conducting an audit, the Australian Taxation Office (ATO) can obtain access to any reports made to AUSTRAC about cash transactions of $10,000 or more.
The ATO can, and will, check your bank accounts, cross reference payments against an ABN and confirm missing income from your tax return.
Along with transaction data provided to the ATO by conventional banks it should be understood that the ATO now has access to throughput data for a number of other service providers such as BPay, BillBuddy, EziPay, PayPal and many more.
Not reporting your full income – The ATO looks at your full income, which may include bank interest, dividends, trust distributions, and other sources. You need to account for all of your income on your tax return, not just your salary or wage. Fail to do so, and you could trigger an audit.
We pass approximately 100,000 records to Centrelink each week. Around 12% of these are found to be Centrelink clients. ATO data is provided under table item 1 in table 1 in section 355-65 of Schedule 1 to the Taxation Administration Act 1953 (TAA).
Insolvency practitioners or liquidators who are empowered to wind up a taxpayer's financial affairs can access the taxpayer's records. Subpoenaing the ATO.
In some circumstances you may not need receipts, but you still need to show you spent the money and how you calculate your claim. Specific exceptions are: Total work expenses $300 or less. Total laundry expenses $150 or less.
Tax evasion investigations are typically initiated when an individual misreports income, credits, and deductions or fails to file a necessary return. These investigations often stem from audits where the IRS finds that an individual willfully and intentionally withheld income and other important financial information.
Typically, the only parties that can check your bank statements or your account information are the account owner(s), authorized account managers and bank professionals. Banks take great care to maintain the privacy and security of their customers' personal information.
Centrelink has very wide powers to thoroughly investigate deposits that have been made into your account. For example, it has the power to obtain your information from other government agencies as well as accessing information from banks, building societies and credit union accounts.
On your tax return, Gross Interest is income paid to you from a financial institution (like a bank or building society). If you have a savings account, you probably earned some bank interest. Your bank reports the interest you received – directly to the ATO! The ATO compares the information with your tax return.
Filing Obligations
A bank must electronically file a Currency Transaction Report (CTR) for each transaction in currency1 (deposit, withdrawal, exchange of currency, or other payment or transfer) of more than $10,000 by, through, or to the bank.
A designated reporting transaction is the retail sale of tangible personal property that's generally suited for personal use, expected to last at least one year and has a sales price of more than $10,000. Examples are sales of automobiles, jewelry, mobile homes and furniture.
A bank statement is a list of all transactions for a bank account over a set period, usually monthly. The statement includes deposits, charges, withdrawals, as well as the beginning and ending balance for the period.
The main tax fraud offences in Australia are contained in sections 134 and 135 of the Criminal Code Act 1995, the maximum penalties for which range from 12 months to 10 years imprisonment.
We will advise you of the audit's outcome and finalisation in writing, generally within seven days of making our decision. We will offer a final interview to discuss any penalties and interest charges if this is not included in the final position paper.