Tax Office warns taxpayers on dangers of relying on AI tax advice

ATO assistant commissioner Anita Challen said Australians should think twice before acting on information from third-party sources such as artificial intelligence platforms, finfluencers, or advice from family or friends.

"AI can be helpful, but it often draws from a broad and inconsistent range of sources, which can lead to inaccurate advice," Challen added.

"For example, it could be drawing content about tax obligations or laws from outside of Australia or outdated sources. Your tax return isn’t the place for guesswork."

Challen said that in an environment where misinformation can spread within minutes, it was important that taxpayers pause and check their tax information before they act on it, such as when they go to lodge their tax return.

"If a tax claim sounds too good to be true, it’s worth checking," she said.

The ATO said that taxpayers who have questions about the legitimacy of tax information should refer to the ATO’s website, the ATO app or speak to a registered tax professional.

"Tax misinformation often sounds convincing, but dodgy tax advice doesn’t just mislead – it can also lead to significant penalties," Challen said.

"Taxpayers remain accountable for ensuring the information they or their agents provide to the ATO is accurate – whether the advice came from a friend, online sources, or if AI tools were used in its preparation.

"Getting it right upfront prevents delays, incorrect claims and the need for amendments or ATO compliance action."

Challen also reminded taxpayers that work-related expenses must relate to earning income, spending the money themselves and being able to support claims with records such as receipts, invoices or logbooks.

The ATO said taxpayers should also ensure they declare all sources of income on their tax return including side-hustles, cash jobs, interest and rental income.

"There are different deductions available for each source of income depending on the nature of the income and occupation."