Marcus Davis, principal and tax specialist at Crowe Horwath, told AccountantsDaily about some of the particularly “odd” claims his firm’s clients attempted to get over the line.
For one, several teachers argued their Foxtel subscription was conducive to forming lesson plans. One history teacher argued the necessities of the History Channel for their professional use.
Similarly, a PE teacher attempted to claim their membership to a football club on the grounds of professional development.
Mr Davis also recalled an office worker who tried to argue that his 60-inch plasma screen TV wasn’t purchased for entertainment purposes, rather as a second screen for his laptop.
Another taxpayer was adamant that his two-week trip to the Gold Coast to check in on his investment property was justifiable, even though it included flight fares and accommodation for his entire family.
Mr Davis also explained that the government has recently introduced changes around what farmers can and can't claim, with one deductible area being the purchase of silos used for storing fodder for cattle.
One optimistic farmer attempted to claim the cost of his silo on the basis that he was storing cattle fodder. The crucial problem was that he was not storing his fodder; it was his neighbour’s.
“It goes without saying that there is often a difference between what people seek to claim and what they are eligible to claim,” said Mr Davis.
The ATO also told AccountantsDaily its “favourite” claim stories of 2016.
One of these included a soldier living in Canberra who had to save all of his receipts on his iPad. However, when he was unable to provide them upon request, his official explanation was that his infant child had knocked it into the bath while he was attempting to take a photo.
Another included a car salesperson who attempted to claim cupcakes on the basis that they were necessary “afternoon tea” supplies.
A truck driver came under scrutiny when he attempted to claim his air fresheners and $12,000 for the cost of sitting in his truck and doing his paperwork.
Des Caulfield, director of MGI Australasia, noted that one salesperson who draws a commission submitted claims in excess of 30 per cent of his annual income.
One such claim in the amount of $5,388 had been made out to his son for “secretarial services”. When asked for a reason behind this, the agent noted that his son would “answer the phone on occasion”.
The same salesperson attempted to claim food expenses for feeding his own tax agent. As a result, he was handed substantial penalties by the ATO when he could not justify his claims.
“Be aware that the Tax Office has benchmarks that they apply to claims for deductions across all industries and occupations. If you fall outside these, expect to be audited,” said Mr Caulfield.