logo
spacer
spacer

 eWombat Search 
>
spacer spacer spacer
Latest Accounting News
Hot Issues
15,000 tip-offs as ATO black economy hotline rings hot
What happens when interest rates hit the floor?
Director Penalty Notices (DPN)
Synchronised global economic slowdown
STP to be increasingly monitored
6 new accounting related videos
GDP by country since 1800
Information needed to be the BBQ expert.
Employee or independent contractor: What happens when it goes wrong?
Single Touch Payroll (STP) reporting irregularities: ATO contacting businesses
Employee entitlements, ‘wage theft’ and Fair Work: Why it’s time to be proactive
How's Australia really doing - the real figures?
Pension deeming rates cut from 1 July 2019
Audit warning sounded as ATO clamps down on dodgy claims
New ATO data-matching program – overseas movement data and HELP debt
ATO black economy strike force heads to Brisbane
Access to more resources and tools than most websites.
Tax Return Mistakes
SMSF advice appetite strong, says ASIC
Taxpayers confused by Scott Morrison’s $1,080 tax refund
Common STP set-up mistakes - ATO
Proposal to hold directors liable for GST set to pierce corporate veil
September 2019 - vital statistics for Australia
Tax Commissioner wants to turn black economy to ‘lighter shade of grey’
Changes to the Private Health Insurance Statement
Up to 9 in 10 ‘other’ expenses adjusted as ATO reveals dodgy claims
Downsizer Super Contribution
Tax payers to receive beefed up tax returns.
10 top global corporations since 1998
Catch-up Contributions
Articles archive
Quarter 3 July - September 2019
Quarter 2 April - June 2019
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Up to 9 in 10 ‘other’ expenses adjusted as ATO reveals dodgy claims

Close to 90 per cent of claims in ‘other’ deductions were adjusted last year as the ATO reveals a number of unusual claims it disallowed, including a $58,000 wedding.



       


 


ATO assistant commissioner Karen Foat has revealed that nearly 700,000 taxpayers claimed almost $2 billion of ‘other’ expenses last year.


Accountants Daily understands that a random sample of 400 of those ‘other’ expenses claims saw adjustments made to 88 per cent of them.


Last year, the ATO revealed an $8.7 billion inpiduals tax gap, with adjustments required for 72 per cent of its random sample of 868 returns.


With ‘other’ expenses, the ATO said it saw a mix of incorrect claims from self-preparers and returns lodged by a tax agent by refrained from giving a breakdown in figures.


“For self-preparers, the errors range from honest mistakes to deliberate over-claiming. In some instances, we have seen cases where a taxpayer has been dishonest with their tax practitioner about the legitimacy of expenses incurred,” an ATO spokesperson told Accountants Daily.


$1,700 in Lego and $24,000 for the cost of raising twins


The top five most outrageous claims seen by the ATO in tax time 2018 included a taxpayer attempting to claim $1,700 for the cost of Lego kits purchased for their children throughout the year.


Another saw a taxpayer trying to claim wedding expenses of approximately $58,000, claiming this was in relation to a work related overseas conference.


“He fraudulently claimed $33,087 in his return and $25,259 in his wife’s. This taxpayer was prosecuted,” said the ATO.


One taxpayer made a claim for “the cost of raising twins” totalling $24,000, while another claimed for the “cost of raising three children”, with one taxpayer stating “new born baby expensive” when making their claim.


Many taxpayers tried to claim the purchase of a new car, in the excess of $20,000, with one taxpayer attempting to claim $3,659 for a car purchased as a gift for their mother.


“A couple of taxpayers claimed dental expenses, believing a nice smile was essential to finding a job – and was therefore deductible. It isn’t and their claims were disallowed,” said Ms Foat.


“Where people make genuine mistakes, we simply disallow the claim. But when people are deliberately making dishonest claims, particularly for large sums, we will disallow the claim and may impose a penalty.


“We want people to understand what expenses they can claim and receive every dollar they are entitled to. But making incorrect claims that are personal or private take funding away from providing essential community services, and that’s not ok.”


 


 


Jotham Lian
31 July 2019
accountantsdaily.com.au


 


 




30th-August-2019