Tim Siebert, a director at Moore Stephens, told AccountantsDaily he believes the tax office is now targeting those expenses that it deems to be “high-risk”.
The ATO has indicated that work-related expenses such as overnight travel, equipment transportation expenses and work-related proportional use of electronic devices are all in the firing line.
Mr Siebert noted that taxpayers often fail to correctly understand certain expenses, while others are too aggressive in their claims and push for too many entitlements.
“Overnight travel is probably poorly understood and poorly documented. If you look at work-related proportion it is common for people to just claim a percentage of a computer, phone or other device without actually having a sufficient connection, a real connection with their work,” he said.
According to Mr Siebert, in identifying those high-risk expenses, the ATO has adopted an approach to questioning that is not accusatory but still attempts to be far reaching.
“The way that the Tax Office is progressing with their profiling and computerised systems, they are being more aggressive, and they’re following more things up. It comes from the perspective of them asking you for the information: they don’t necessarily think you’ve done anything wrong but they want you to prove it anyway,” he said.
“They’re very broad sweeping questions, just to see if they catch people out."
Substantiation and pre-planning when reporting income still reign supreme when it comes to avoiding the wrath of the tax office, Mr Siebert added.