ATO Targets

The Australian Taxation Office (ATO) has nailed corporate fat cats firmly to the top of its hit list as it prepares to process tax returns at the end of a torrid financial year.

In this year’s federal budget, Prime Minister Kevin Rudd allocated a hefty $595.2 million for the ATO to ramp up its audit investigations, as well as support those suffering financial hardship amid the economic downturn.

It also plans to continue its crackdown on work-related expenses, targeting truck drivers, sales and marketing managers, sales reps and electricians.

Jennie Granger, second commissioner of tax, said business executives and directors were number one on the taxman’s radar this year.

Ms Granger said the ATO have scrutinised 362 executives and directors' pay and bonus schemes in eleven months to June 1 – recouping almost $39 million in taxes.

The super rich – those worth more than $30 million – have been scrutinised by a taskforce for the past ten years.

Now, that taskforce is extending its remit to those worth between $5 million and $30 million – who the tax office said are beginning to employ similar tax dodging tactics as the super-rich.

Meanwhile, tax refund fraud remains high on the ATO’s priorities – with tax returns completed by unregistered tax agents accounting for 98 percent of all dodgy returns.

Ms Granger said the tax office will also be on the hunt for anyone tempted to crank up their work expenses claims.

The economic misery has seen many people forced into a ‘fire sale’ of their assets, the ATO said. Offloading assets quickly to meet debts has become more commonplace, but people must declare the gains, the tax office warned.

The ATO plans to monitor financial transactions more closely, particularly partnership and trust incomes, managed funds, share schemes and insurance policies.

It also warned Australians to be on the look out for dodgy investment schemes. Last year, the ATO froze 14 bank accounts, investigated 250 people and collected more than $2 million from dodgy schemes.