Business Links Australia Pty. Ltd. is a CPA Practice
CPA Australia Logo
Liability limited by a scheme approved under Professional Standards Legislation
Hot Issues
spacer
Up to 9 in 10 ‘other’ expenses adjusted as ATO reveals dodgy claims
spacer
Downsizer Super Contribution
spacer
Tax payers to receive beefed up tax returns.
spacer
10 top global corporations since 1998
spacer
Catch-up Contributions
spacer
Life Insurance
spacer
Community tip-offs trigger ATO visits
spacer
Australia at a glance
spacer
2019: Tax Time Checklists - Individuals; Company; Trust; Partnership; and Super Funds
spacer
Small business clients need to be ready for STP by 30 September
spacer
Big four firm outlines new financial year checklist for SMSFs
spacer
Alert - Online Share Accommodation
spacer
ATO flashes warning over $7.2bn car expenses claims
spacer
Vital statistics for our great nation.
spacer
3 out of 4 tax dob-ins are about business
spacer
Tax on compensation received for inappropriate advice
spacer
‘Extra care’ crucial in avoiding ATO spotlight this tax time
spacer
ATO clears up FAQs about Single Touch Payroll
spacer
GST reporting: common errors and how to correct them
spacer
LRBAs, guarantees in need of review after property market falls
spacer
Victorian Property Valuation Cycle
spacer
Australia - toward EOFY 2019
spacer
Australian Taxation Office (ATO) expects 200,000 to miss out on refunds by failing to lodge
spacer
Biggest personal tax cuts in a decade a priority for Government
spacer
Government rules out GST changes following ATO report
spacer
ATO issues warning after ‘unprecedented’ spike in impersonation scams
spacer
Crypto transactions in ATO sights with new data-matching program
spacer
Government to establish $2 billion fund for small business lending
Article archive
spacer
Quarter 2 April - June 2019
spacer
Quarter 1 January - March 2019
spacer
Quarter 4 October - December 2018
spacer
Quarter 3 July - September 2018
spacer
Quarter 2 April - June 2018
spacer
Quarter 1 January - March 2018
spacer
Quarter 4 October - December 2017
spacer
Quarter 3 July - September 2017
spacer
Quarter 2 April - June 2017
spacer
Quarter 1 January - March 2017
spacer
Quarter 4 October - December 2016
spacer
Quarter 3 July - September 2016
spacer
Quarter 2 April - June 2016
spacer
Quarter 1 January - March 2016
spacer
Quarter 4 October - December 2015
spacer
Quarter 3 July - September 2015
spacer
Quarter 2 April - June 2015
spacer
Quarter 1 January - March 2015
spacer
Quarter 4 October - December 2014
Quarter 2 of, 2015 archive
spacer
SMSFs may be missing out on allowable deductions
spacer
Change to Early Access Rules
spacer
Capital Gains Tax – which year?
spacer
Checklist for Employers Year-end
spacer
Year-end Tax Planning – Small Business
spacer
Year-end Tax Planning – Trusts
spacer
Reminders and Tax Strategies for SMSFs pre-year end
spacer
Year-end Tax Planning – Individuals
spacer
Tips and traps for acquiring SMSF assets from related parties
spacer
Overtime Payments May Eliminate Claims for Unfair Dismissal
spacer
ACCC issues scam warning
spacer
SME Dispute Resolution
spacer
Land Tax – Victoria
spacer
R&D incentives at risk
spacer
ATO adds ‘hot issue’ to its SMSF target list
spacer
Additional Super Contributions Not Appropriate for all
spacer
Issues arising from an underpaid pension
spacer
Salary and Superannuation after the death of an employee
spacer
IPA calls for zero pc tax rate
spacer
Australian Government - Budget 2015
spacer
Budget 2015 - some professional opinions
spacer
Looming end to SMSF Borrowings?
spacer
ATO warns SMSFs on franking credits scheme
spacer
Lump Sum Payments - Employer Reporting
spacer
Small business tax cuts 'not enough', says IPA
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