The ATO recently announced it will create risk profiles for practices based on a comparison of their clients’ WRE claims with those made by similar taxpayers.
ATO assistant commissioner Colin Walker spoke with AccountantsDaily about the new regime.
“Work-related expenses have always been a focus of the ATO, both for self-preparers and for agent lodgers,” Mr Walker said. “We've just started a different way of looking at work-related expenses.”
Mr Walker said the shift has been towards taking an agent rather than a client perspective.
“What we're doing at the moment is taking a view from an agent perspective and looking at all their clients and doing the analytics,” he said.
“Essentially what we try to do is compare taxpayers to taxpayers in similar areas, in similar professions, and then look for what you would describe as outliers, so essentially those that don’t seem to be around what you would expect would be the average-type claims.”
There are two reasons for the new approach, according to Mr Walker.
“The object behind it is twofold; one is to be very transparent about what we know and what we're seeing, and to better understand their client base,” he said.
“The second is if we find issues, we can highlight those to the agents and clarify and clean up some of that. And of course if we find significant problems in there we can actually deal with them directly with the agent.”
Mr Walker emphasised that not all agents who appear to be outliers will be making illegitimate claims.
“There are always cases where particular agents focus on particular types of industries, and may even focus on particular types of taxpayers,” he said.
“So you can actually be outside of what you would call the mean-type figures but still be quite legitimate.”