The Australian Taxation Office collects information from a wide range of third-party sources to ‘data match’ information provided on tax returns, activity statements and schedules. This enables them to identify, for example, where people and businesses may not be reporting all of their income.
There are more than 600 million transactions reported to the ATO annually. These third party sources and information they provide include:
– Banks, financial institutions and investment bodies providing investment income
– Employers and Government Agencies providing details of payments to pensioners, employees and contractors
– State and territory title offices and revenue agencies report sales and transfers of real property
– Stock exchanges and share registries report share transactions
– International treaty partners ensure income earned overseas by Australian residents is reported back in Australia.
The data supplied is matched back to the individual taxpayer using an identifier such as your Tax File Number (TFN), name and date of birth.
The aim of the Tax Office data matching is to detect people and businesses operating outside the tax system and to detect fraud against the Commonwealth. It seems the Tax Office has eyes everywhere now!