The ATO has given notice of its intention to collect real property rental bond data from state and territory rental bond authorities dating back to 20 September 1985 (the introduction of the CGT regime). The data will be collected to identify individuals who have income tax reporting obligations for income producing properties or have a CGT event arising from the sale of real property for the period from 20 September 1985 to the 2019/20 financial year.
Interesting. What if a taxpayer didn't keep records of a tax return they lodged 10 years ago? Asking for a friend.
Ato might argue fraud or evasion and then no time limit for amendment. Issue a default notice of assessment with penalties and interest and up to your friend to argue against it.
If not they should make a voluntary disclosure before audit which may assist in reducing any penalties.
Yes ive seem them do the same with voluntary disclosures i was involved in previously. Ato knew a client had a ferrari (make model registration) jetski and a boat all beforehand.
Ha...that would be remarkably easy. A lot of foot work perhaps but not difficult. All require state registration (actually not sure about jetski).
I was also told that the ato had foot patrol in the car parks of some of the big corporates taking down license plates of ferraris, bentleys, etc in the car park and matching owner details to incomes on returns. This was about 7 years ago. Another famous restaurant was also busted for cash takings by ato officers sitting outside the cafe across the road and marking every customer that came in during a two week period. Data analysis done and extrapolated.
I had a former client (car dealer) handed a s264 notice to provide the ATO details of the sale of luxury vehicles over $150k. They wanted copies of each completed contract. My advice was they must comply - Thousands of the things over several year. A while later I heard they were risk profiling unexplained high wealth... But perhaps also a crime commission issue. Sometimes other agencies rely on the ATO powers and they share data
There was a one liner in the last budget about the ATO seeking to review how to make property rental and sales etc data an obligation for the property industry. A funded program to assess how was my understanding. The CGT withholding regime has some major traps too. Three pinch points: - Application for resident clearance - Form One for non-resident owners I can see foreign owners who havent complied with any taxation reporting facing notices to withhold proceeds !! Saw first one the other day for a concerned enquiry...30 years of unreported income and now they have to consider a vol disclosure. I expect ATO will to issue a notice to buyer to remit 100% of net proceeds to ATO. I have had a small number of client enquiries with arrears receive default assessments for CGT sales. ATO data is pretty good. That said I never recommend relying on a default assessment due to the 75% tax penalty.
I don't think the date of birth is given when you buy a property. I might be wrong. I still think it will be a hard job to match people up and in the end it might fail because an individual who didn't declare CG say 15 years ago might argue it wasn't fraud. They could have been reckless or careless, not fraudulent, and therefore you can only review the last two income tax assessments.
Loan applications tied to the property also have dates of birth and passport details. Incredibly easy to cross match data. And for many taxpayers its a four year amendment period as well. Fraud unlimited. Then up to the person to hire a tax lawyer to argue it wasnt.
The problem with the unlimited period of "fraud and evasion" is that many taxpayers dont think it applies to them. It only applies to the big end of town and tax schemes etc. And when it does apply it goes back in time with no safety net of the 2-4 year period to amend. There is no time limit. Fraud and evasion includes failing to lodge many years of returns or disregarding the rental income from reporting. ATO audit decision will conclude the taxpayers sought to avoid tax by not operating within the scope of tax law to lodge a return that is accurate by the due date required by law hence denying the Commissioner the opportunity to assess tax. This contrasts to evasion which requires participation or arrangements outside tax law eg schemes and the like. The ATO would conclude that income has been concealed and/or wilfully ignored.
I recall around 2000 that the ATO sampled a few hundre lodoc loans and found a incredible correlation of something like 90% + of low doc loans that claimed to have income that serviced loans and the loans were actually serviced only for tax returns to show far far lower incomes incapable of servicing these loans. A massive project to address evasion targetted those borrowers and it seemed like cash economy. For the ATO is was like shooting fish in a barrel.