ATO's intense focus on wealth
Australian high-worth individuals have been served notice by the Australian Taxation Office (ATO) that they will be subjected to more intense scrutiny with increased audits and reviews.
The ATO’s increased level of focus on high-net-worths was revealed this week by Tax Commissioner Michael D’Ascenzo, who not only announced the development of a new computer algorithm for linking people and their assets, but a specific targeting of high-net-worth individuals.
He said the ATO regarded high-net-worth individuals as being those controlling $30 million or more and acknowledged that tax officers would also be taking into account media reports relating to people’s wealth.
D’Ascenzo said there would be more audits and reviews and better coverage of complex arrangements and structures, with an additional 19 audits of high-worth individuals in 2009-10 — with 120 audits expected to be underway during the year.
In addition, he said the ATO also expected to carry out over 650 reviews.
Referring to the ATO’s new computerised algorithm, D’Ascenzo said the tax office had issued just over 1,000 letters in March 2009 to potential high-worth individuals identified through the process to “confirm our information and understanding of their individual circumstances”.
“From the responses received to date, we have already identified 114 new high-worth individuals and expect, based on these results, to identify around 600 new high-worth individuals in total from the batch of 1,000 potentials,” he said.
The tax commissioner said the ATO expected to send a further 1,000 to 2,000 letters to a further batch of potential high-worth individuals in the new financial year.
“We are also looking to increase our use of external data such as in media reports, AUSTRAC, [Australian Securities and Investments Commission] information and so on in order to identify significant tax events and then pro-actively seek further information before lodgment of tax returns by the taxpayer,” he said.
AUTHOR
Mike Taylor
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