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What does ATO Data Checking mean for your income tax return?


Many see their income tax return as a necessary evil and attempt to play the system to their benefit.

It is important to recognise that your tax return is an essential document which the Australian Government and Australian Tax Office use to determine if you are paying your fair share of tax or receive the correct refund amount.

The ATO can cross-reference the information you lodge in your income tax return with external sources. The ATO does this to ensure your income tax return accurately reflects your streams of income and if your deductions are reasonable.

Banks, employers and health insurers are required by law to give the ATO information which the ATO can use to cross-reference your income tax return.

In a tax audit, the ATO will use this external information to confirm:

  • Amounts of interest income

  • Amounts of employment income

  • Amounts of government payments

  • Capital Gains Tax from the sale/disposal of shares or property

  • Amounts of government grants

  • Amounts of contractor income (if in the building/construction industry)

  • Distributions received from partnerships, trusts or managed funds

  • Other details lodged in an income tax return

With the ATO able to cross-check information, it reinforces the importance of keeping written receipts/evidence of your deductible expenses and sources of income. In a tax audit, the burden of proof lies with you to prove the amounts in your income tax return are reasonable and legitimate.

Contact us at Dolman Bateman or Buildersbooks if you are looking for an experienced accountant or Bookkeeper.


This information is not to be relied upon without speaking to your accountant, tax agent or financial adviser depending on the advice.

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