Understanding ATO guidelines

Anyone tempted to cheat on their tax, whether in this or future financial years, would be well advised to take close note of the current compliance program of the Australian Tax Office (ATO).

Released earlier this year, it highlights some of the key tax avoidance and evasion issues that are attracting special attention.

In the case of the average employee, one major focus is on the work-related expense claims made by building and construction workers and sales and marketing managers.

Use also will be made of new information sources to check that taxpayers aren't making unjustified claims for the private health insurance rebate.

When it comes to more sophisticated evasion strategies the tax office, among other things, has flagged a crackdown on those involved in developing property, be it on a small or large scale.

One particular concern is the attempt by some to avoid their GST obligations by using a private company to manage the development and then liquidating it as a way of "disengaging" from the tax system when the property is sold.

Trusts are another area of concern, a task force having been set up to deal with anyone who seeks to misuse them, including situations where taxable income is diverted artificially to an individual or entity with a lower tax rate.

Self-managed super funds are also being targeted, with the tax office planning to carry out 1100 checks on whether SMSFs are fully meeting their income tax obligations and another 15,100 checks on whether the funds are complying with the relevant regulations.

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