Have you ever been worried about a personal claim you’ve made on your tax return? Maybe it was slightly questionable, or you were lacking appropriate documentation.

Well, provided the ATO chooses to not select you for a ‘random’ audit, the claims in question will proceed. But considering the millions of Australians lodging their tax returns each year, how does the ATO select which individuals to audit? Well, traditionally this is decided through an intricate system of data matching the information contained within your tax return to other tax returns similar to your own. This helps the ATO in identifying outliers, and then ultimately making a judgment call on which returns to investigate further.

But considering contemporary Australia, and individuals’ seemingly endless ability to hide income, the ATO is forced to ‘keep up with the times’ and find new and creative ways in identifying tax fraud.

So, what are they doing about this?

Well they are of course turning to more progressive investigation methods using such tools as social media. The Commissioner recently gave this example “…say you have a two-parent family reporting $70,000 and $50,000, but has three children at private schools, has taken business class flights on overseas trips three times in the last two years”. The evidence of this lifestyle can be prominent on individual’s social media accounts, not to mention the ATO having access to your flight records, bank details and much more.