ATO crackdown on cash economy

As part of the ATO's approach to managing tax risks, this financial year they will send around 110,000 letters to taxpayers who may be participating in the cash economy.

 
The majority of letters will be sent to businesses reporting outside the 'small business benchmarks' for their industry.

The ATO claims that their small business benchmarks (which they have developed for over 100 industries) help them to identify businesses that may be avoiding their tax obligations by not reporting some or all of their income.

The letters inform taxpayers that they have been identified as a result of one of the ATO's cash economy indicators, and will encourage them to review their records to ensure they have correctly reported all income, especially cash transactions.

In addition, the ATO warns that businesses that fall within the benchmarks should not assume that they are safe from an ATO audit or review.

The benchmarks complement the ATO’s recently expanded data matching program, and they also use other sources of information to identify those not meeting their tax obligations, including information from other government agencies, trade suppliers, tax returns and activity statements and allegations of tax evasion sourced from the community.

If you receive a letter from the ATO, contact us so that we can assist you to review your records, returns and income, and to advise the ATO if a mistake has been made.