ATO to scrutinise every property sale in the last decade, car sales in the last year

The ATO is taking its data matching processes to the next level, announcing that it will ask state and territory authorities for data that will allow it to scrutinise every property sold in the last 11 years for unpaid capital gains tax, income tax and GST.

In addition, the ATO will also ask government authorities for data on the every vehicle sale, transfer or registration between July 1, 2009 and June 30 this year, where the vehicle involved had a market value of more than $10,000.

While the ATO has previously focussed on luxury cars, Tax Commissioner Michael D’Ascenzo says the ATO will now focus on a much larger group of taxpayers.

“We’re looking to identify businesses that sell vehicles and fail to report or under report those sales,” D’Ascenzo said in a statement.

“We’re also looking at whether a person’s income was not sufficient to support the purchase of the vehicle. If that person is associated with a business, we want to make sure the purchase is not being funded by skimming some or all of the cash takings.”

The sweep of the property sector is even bigger. The ATO will ask state and territory authorities for details of every property title transfer between July 1, 1999 and June 30, 2010.

This data will then be matched against taxpayer records to pinpoint tax dodgers.

“The information will help us identify people who may have incorrectly reported or not included capital gains tax, income or GST in their income tax and business activity statements,” D’Ascenzo said.

The latest data-matching push highlights how adept the ATO is becoming at using technology to find tax cheats. This year, the tax plans to match over 220 million records.

As well as using government records to pursue assets sales, the ATO’s data matching program stretches into areas as diverse as online selling (including this recent crackdown on eBay sellers), luxury goods, banking (including this recent deal to get data from banks) and share ownership.

Yasser El-Ansary, tax counsel at the Institute of Chartered Accountants, says the ATO is ramping up its data-matching activities after the installation of a new $800 million IT system.

“Clearly the ATO has had a focus for the last five or so years on building up their capabilities around data matching. The feel the opportunity is there for them to scrutinise taxpayers through third party data. This is the future direction that the ATO will clearly be taking.”

However, he does say the ATO will need to exercise some caution in using third party data to issue penalties or fines where taxpayers have not had a chance to disclose and explain certain transactions.