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37: “How Will They Know?” - Let’s Talk About the ATO’s Access to Data
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How much access does the ATO have to your information? The answer might surprise you.
Did you know that the Australian Tax Office (ATO) knows about your bank transactions, your overseas income, when you buy a car or property or sell one, when you enter and exit the country? In this enlightening episode, we're diving into a question that sparked a lot of curiosity in a reel posted on social media about overseas income — "How will the ATO know?"
Prepare to uncover the extensive network of information providers both in Australia but also internationally that the ATO receives and provides information to. The access that the ATO has to information, and the powerful tools and methods including data matching, that it employs, to ensure compliance and detect fraud, may shock you.
This information may be what triggers the ATO to review or audit you or your business including questioning your expenditure against your income.. The failure to lodge a return is almost the worst idea too, as then the ATO can issue you an assessment for you to prove wrong.
In this episode of Smarten Up! The Tax and Business Podcast, you'll learn:
- The topic that piqued interest — How does the ATO know about your overseas income? (00:08)
- How the ATO uses data matching to pre-fill your tax returns with information from health insurance, banks, and investment bodies (01:18)
- Third party sources, from motor vehicle registries to online selling platforms, that feed information to the ATO (02:34)
- The scope of international tax treaties and the sharing of financial account information globally (04:10)
- Examples of how the ATO uses data to track undeclared income, including Sally’s own experience of living in Canada (05:18)
- Insight into the bulk data exchanges between tax authorities around the world (11:25)
- How the ATO uses personal living expenses worksheets to detect discrepancies in reported income (16:02)
- What to expect during an ATO review or audit and how to handle it effectively (17:07)
- Steps to take if you realise you've made an error in your tax returns, including the benefits of proactive amendments (19:30)
We've peeled back the curtain on how the ATO keeps tabs on your financial activities, both domestically and internationally. Armed with this knowledge, you can now better ensure that you stay compliant and avoid any unpleasant surprises.
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