Every year the ATO investigates and “catches” individuals and businesses that have made inaccurate claims on their tax returns, or neglected to declare revenue streams. And every year they get better at using data matching techniques to collect the data they need to flag these inaccuracies. 

If the ATO audits you and you’re found to have underreported or misled with your tax return, the penalties can be severe, and even involve jail time. Sadly, in some cases, such incidents have nothing to do with the individual. Rather, their accountant has overlooked something or made an error in completing the tax return on their behalf. 

To avoid that, you should speak to the team at EPAS. We will look to maximise your tax return, but our proven processes and the depth with which we work with you will ensure that the ATO has nothing to audit.

What is ATO data matching?

This year the ATO has widened its data matching capabilities to include information from property managers, landlord insurance and sharing economy providers. If any of those apply to you, you need to be particularly careful with how that information is reflected on your tax return.

Data matching refers to the process conducted by the ATO to compare data from various sources with the information provided in taxpayers' tax returns. The purpose of data matching is to identify any inconsistencies, errors, or discrepancies that may exist between the data reported by taxpayers and the data obtained from other sources.

The ATO already receives data from a wide range of sources, including employers, financial institutions, government agencies, and other third parties. This data includes details such as income, investment earnings, capital gains, dividends, interest, and various other transactions. By comparing this information with what taxpayers have reported in their tax returns, the ATO can detect instances where individuals or businesses may have underreported their income or failed to fulfill their tax obligations.

When inconsistencies are identified, the ATO will almost certainly initiate compliance activities, such as conducting audits, issuing amended assessments, or taking other enforcement actions to address any tax-related issues.

What data matching means is that the ATO is going to be very efficient at what it does. It can run checks against many more people in any year, and, thanks to automation, flag more issues for its employees to then follow up. 

The ATO receives around 12.4 million income tax lodgements each year, and while it acknowledges that it can’t verify each of them, the data matching strategy helps close the gap significantly. The long-and-short of it is that if you’re worried about your tax return, rather than trying to “fudge” the results, you should instead speak to experienced accountants about what you can do.

Give yourself peace of mind that even with data matching the ATO’s not going to audit you. Contact EPAS today!