Profiling has its advantages

The Australian Taxation Office has made use of its new $800 million computer system to identify and block what it claims are $125 million of fraudulent or overstated refunds.

This figure represents the tax returns lodged in July 2011 alone and is already more than the entire amount detected last financial year which was $105 million.

So how will this affect you as a taxpayer? Simply, if you have done the right thing and lodged your tax return correctly, you needn’t worry. There is the possibility of delays in your return if you are subject to extra scrutiny and you may even be asked to provide additional information in certain instances however this is not a reason to leave out claims which you are entitled to.

We have been advising our clients that as long as their return was completed correctly and they only claimed deductions/offsets to which they were entitled, then any questions raised by the ATO will be able to be answered quickly and with minimal inconvenience.

No doubt there will be a small number of instances where taxpayers who have done the right thing will need to provide some additional information but this is the by-product of the ATO trying to catch those who disregard their obligations. We can only hope that in the long term, this benefits the majority of taxpayers who adhere to their obligations and in the meantime, it helps to have an expert like those from Young Financial Group in your corner.