ATO expands cash economy data matching program

[News release from the ATO on 29 March 2010]

In its continuing effort to detect businesses operating in the cash economy, especially in high risk industries, the ATO has recently expanded its data matching program on two fronts.

The program now includes data from banks that identify credit card and EFTPOS sales made by Australian businesses, and data from the sale of plasterboard in NSW to plasterboard installers.

The data matching program allows information from a variety of sources to be brought together to identify businesses operating in the cash economy. These businesses may ‘skim’ some or all of their cash takings, run part of their business off the books or not report all their income.

The data obtained is compared with taxpayer information and the ATO’s small business benchmarks to identify businesses which have not reported all their income.

Some businesses identified at risk of potentially under reporting their income may be contacted by the ATO and asked to consider making a voluntary disclosure of any under reported amounts. In other cases the data obtained will also be used to support default assessments of a business’s tax liabilities, which could mean the business is then liable for penalties as well as any unpaid tax.

The ATO’s data matching program helps to promote a level playing field for small businesses by taking firm action against those who operate in the cash economy to obtain an unfair advantage.

Data is collected by the ATO in accordance with the Federal Privacy Commissioner’s guidelines on data matching in Commonwealth administration.

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