Many people have reported that they received a letter from the ATO. After opening it, they found that ATO is accusing them of some fault by the automated data-matching system. ATO has started to crack down on several exaggerated tax claims. Such letters by ATO has also become a common thing for most Australians. Here, we are going to explain it with the help of a Melbourne accountant.
Many people are not precisely aware of what is data-matching. Even if you don’t know about it, you should at least know the meaning of data-matching in the context of your tax return.
Data-matching as explained by a Melbourne Accountant
The ATO uses an automated technique called data matching to check your claims. You should know that major third-party organizations are bound to share information about their employees with the ATO.
When ATO matches your data against the one provided by the third-party organization, you will get such letters in case of discrepancy. You should also know the names of the organizations that share the data of their employees/customers with the ATO. Here are the titles:
- Government Agencies
- Insurance Companies
- Employers
- Banks
Why has the number of people getting such letters increased suddenly?
We have already explained the meaning of a letter in data-matching. Now we are going to discuss the reason behind the increased number of people getting this letter.
Advancements in the field of computer software give an edge to the ATO for matching data more precisely than before. As a result of which it is detecting more faults.
Online media is now helping people in completing most of such transactions. All the service providers like Air tasker, Uber, etc. are obliged to share the data of their customers with the ATO. Due to such an infrastructure, ATO is now able to collect more data than before. The ATO is inspect more data daily to catch tax evaders.
