ATO’s Version of the Background Check – Data Matching

Dated: May 2011

The ATO doesn't only look at what you put on your tax return to determine whether you are telling them everything. They also gather information from other sources, both within Government and industry. For example:

- Registered vehicle purchases monitoring: The ATO is obtaining data from vehicle registries (eg Vicroads) where a vehicle was sold, transferred or newly registered between 1 July 2009 and 30 June 2010 and the value of the vehicle was $10,000 or more. Information is being gathered on a range of vehicles including cars, boats, motorcycles and caravans. This information is being used to detect undeclared income and determine whether other tax laws, such as fringe benefits tax, are complied with.

- Real property transfers: The ATO is collecting identity and transaction details from state revenue authorities (eg. State Revenue Office) relating to property title transfers between 1 July 1999 and 30 June 2010. It will use the information to check if taxpayers are complying with the capital gains tax and GST rules.

- Interest & dividend income matching: The ATO receives information from financial institutions and dividend paying companies and matches this information with your tax return to determine if you are declaring all your income. This program has been going for many years and has a proven history of success.

The ATO is continuously working at expanding the sources from which it can obtain useful information. It is already obtaining information from industry and trade associations (see our article titled ATO’s new weapon – Benchmarking).

In this computer age, it is much easier for the ATO to collect this information. So before you assume the ATO won’t find out about something because you don’t declare it in your tax return, you might want to consider who else already knows. It is possible the taxman already does too!