The Austrailian Tax Office (ATO) today issued a new guide for advisers and their clients regarding the way in which the ATO conducts audits in the cash and hidden economy area. The guide discusses “…risk indicators to identify businesses for review or audit” that “…include results from data matching, comparisons of business information against our small business benchmarks and reports from the community”. In this connection, the ATO has an on-line evasion reporting facility that is in the Australian vernacular, known as the “dob-in line”.

In the guide the ATO reveals that much of the data they rely upon is received from third parties such as on-line auction houses. Much of this data is likely to have been gathered by bot programs that use appropriate search terms. Accordingly, it is likely they will have data not only from Australian online auctions (of which there are now many), but also those in the US, UK and Europe. Australian cash economy vendors should not assume that data from their eBay accounts is not capable of being harvested by or for the ATO!

The guide tells advisers and their clients how the ATO conducts various types of audit, how they select businesses for audit, what happens during each type of audit, how and where the ATO auditor will meet with you, what the possible outcomes might be, and how long it all may take.

For those who are interested, the guide can be found HERE.

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