ATO Has Announced New Data-Matching Targets

Data-matching is  a technique now regularly used by the ATO to gather a wide range of information it can then trawl through to detect compliance with the tax laws.

No one should underestimate the sheer volume of data the ATO now collects and with the ever-increasing sophistication of techniques to analyse and “slice-and-dice” that data, the tax affairs of Australians will come under closer scrutiny.

In its latest endeavours, the ATO has announced data-matching programs targeting offshore bank accounts, credit and debit card sales, and real property transactions.

The information collected will be electronically matched with certain sections of ATO data holdings to identify non-compliance with lodgment and payment obligations under taxation laws.

ATO Data Matching Programs

The ATO has announced that it will request and collect information for the purposes of the following data matching programs.

Banking Transparency Strategy Data  Matching Program

The ATO will collect the offshore account details of approximately 50,000 bank customers to identify Australian resident taxpayers with offshore bank accounts which may evidence undeclared income and/or gains in the 2008/09 to 2010/11 financial years from the major banks (i.e., the ‘Big Four’), as well as 14 other banks, including the Bank of Queensland, Macquarie Bank, Citigroup, HSBC, Rabobank, Arab Bank Australia, Bank of China, Credit Suisse, and the Union Bank of Switzerland.

The data-matching is intended to help the ATO identify any non-compliance with lodgment and payment obligations under the tax laws. Of course, offshore bank accounts may have been established quite legally and for legitimate business or other reasons. The ATO’s data-matching may, however, result in a query that taxpayers will have to answer.

The detection of offshore bank accounts is now a key activity of revenue authorities around the world. It is not limited to Australian residents and has also been a major focus of the U.S. Internal Revenue Service as well concerning U.S. residents.

 Credit and Debit Card Data Matching Program

The ATO will request and collect data relating to credit and debit card sales relating to approximately 900,000 merchants for the period 1 July 2011 to 30 June 2012 from the Big Four banks, as well as St George Bank, Bendigo and Adelaide Bank, Bank of Queensland, BWA Merchant Services, American Express Australia, and Diners Club Australia.

The program is designed to enable the ATO to better understand and address the compliance behaviour of taxpayers through electronic bulk data-matching to identify potential ATO administrative action.

This might include checks on whether tax returns or BASs have been lodged, whether all sales have correctly been returned by the merchant and/or whether GST has been correctly collected and recorded.

It is expected that records relating to approximately 900,000 merchants will be matched. Many SMEs may find themselves included in this matching.

Real Property Data Matching Program

Buying and selling property won’t escape the taxman’s gaze either. The ATO plans to collect the names and addresses of individuals and entities transacting with real property from various sources, including state revenue offices, residential tenancy authorities, and other government agencies.

The ATO will request and collect names and addresses of approximately 10.4 million individuals and other entities transacting with real property from the various State Revenue

The ATO aims to address non-compliance with lodgment and debt payment through electronic bulk data-matching to identify potential ATO activity.

 Ref: Government Gazette GN No.50 of 2012,  pp 3381 to 3383

Data-matching is well and truly here to stay. Doubtless the ATO will conduct more of these programs throughout the coming year. Stay tuned for more details.