The Australian Tax Office (ATO) announced that it would double the number of audits reviewing rent deductions.
According to Assistant Commissioner Gavin Siebert, ATO made the rental deduction a top priority in 2019. "A random sample of rent deductions revealed that nine out of ten people had an error. We are concerned about the extent of non-compliance in this area and we will be looking very closely at the claims this year, "he said.
ATO detection methods have become more advanced. "We use a range of information from third parties, including data from financial institutions, real estate transactions and lease guarantees from all states and territories, as well as booking platforms from third parties. Online hosting, combined with sophisticated analytics to analyze each tax return, "said Siebert. ]
Once a claim of concern is identified, ATO staff will investigate and encourage taxpayers to modify unjustified claims. If necessary, the government agency will start audits.
"We plan to double the number of in-depth audits we do this year, which will increase to 4,500. Focus will be on excess interest 39; equipment claimed as repairs, the incorrect allocation of expenses for other holiday homes, and omitted income from the sharing of housing, "Siebert said. "Once our listeners start, they can search even more data, including utilities, tolls, social media and other online content, to see if the taxpayer has the right to claim what he did. "
ATO stated that no penalty would apply to taxpayers who amend their returns due to actual errors, but deliberate attempts to claim in excess may result in penalties of up to 75% of the claim.
In 2017-2018, ATO audited more than 1,500 taxpayers applying for rent and applied penalties amounting to $ 1.3 million.
A case example involved a taxpayer who had been penalized more than $ 12,000 for over deducting deductions for his vacation home when it was not actually available for rent, including by blocking during seasonal vacation periods.
"Our tax era, our message to taxpayers is clear. If you rent a room or property, all the money you earn must be declared as income and the deductions you claim might have to be allocated for private use, "said Siebert.
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