Australians Quizzed By Tax Office Over High Work-Related Expense Claims

by Mary Swire, Tax-News.com, Hong Kong

09 July 2002

The Australian Taxation Office (ATO) warned at the weekend that some 150,000 taxpayers may face audits unless they can provide documentation for work-related expenses claims.

According to a report in the Sunday Telegraph, claims for work-related expenses were up 12% last year, compared to an increase of just 1.6% the previous year, a fact which has caused eyebrows to be raised at the tax office.

Speaking at the weekend, ATO Assistant Commissioner, Raelene Vivian announced that:

'We have sent out 150,000 letters across Australia telling people they had a high work-related expenses claim last year, and that we will want more evidence this year.'

Ms Vivian went on to reveal that key areas likely to fall under the scrutiny of auditors in the event of an investigation will be: work deductions, rental properties, capital gains, bank interest, government allowances and private health insurance.

Speaking to the Sunday Telegraph, the President of the National Taxation Accountants' Association, Ray Regan blamed the government's Tax Pack for 'tempting' people into claiming deductions to which they are not entitled.

'Tax Pack is a great temptation because it makes it sound easier than it is, particularly for work-related clothing and self-education,' he explained, adding that: 'The ATO has an agenda - they are going to pick up plenty of mistakes in the audit of someone who has used Tax Pack. Audits bring in tens of millions of dollars.'

However, the ATO's Assistant Commissioner defended the Tax Pack against Mr Regan's allegations, arguing that 90% of taxpayers who use the pack have no problems completing it.

'We go through a very rigorous process to develop Tax Pack each year,' she told the newspaper.

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