ATO ramps up its focus on rental properties

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The ATO will undertake 4,500 audits of taxpayers it considers are high risk because they overclaim or don't declare income relating to rental properties.

Richard Boyle faces the possibility of a lengthy prison term for blowing the whistle on the ATO's debt collection practices.

The information contained in these reports — such as council rates, management fees and other costs — could then be used to pre-fill tax returns, he said. The ATO hoped to roll the change out next financial year.The ATO had previously undertaken limited audits of rental deductions claimed for the 2016-2017 tax year, which Mr Kendrick said uncovered a handful of agents that had deliberately had falsified claims or made claims for properties that do not exist.

He also noted errors in claims made for capital improvements. He said people were making claims for items in the same year as the expense occurred for items that should be claimed at 2.5 per cent over 40 years. For the first time in almost 25 years, the average work-related claim decreased, Mr Jordan said. It fell on average by about $130 over the past two years, and the estimated revenue gain for that same period would be about $600 million.

Almost half of all taxpayers claimed they were required to wear uniforms, protective clothing or occupation-specific clothing totalling about $1.8 billion in 2016-2017. He said last financial year the ATO nudged about 180,000 people and about 80,000 of them reduced claims instantly, which resulted in about $25 million in additional revenue being collected for 2016-2017.

 

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