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IN BRIEF
- Misinformation is becoming more prevalent at tax time, the ATO says.
- People are ultimately responsible for their own tax returns.
The Australian Taxation Office (ATO) has announced it will be focusing on two critical areas as Australians begin filing their tax returns. The agency warns that the growing trend of online ‘tax hacks’ and advice generated by artificial intelligence (AI) could potentially lead to penalties for taxpayers.
The ATO is particularly scrutinizing work-related deductions and expenses, as well as undeclared income, which are common areas where taxpayers tend to make mistakes.
Taxpayers are reminded to declare all income sources, including interest, rental income, side jobs, and cash payments.
“Different deductions are applicable depending on the type of income and the taxpayer’s occupation,” explained ATO Assistant Commissioner Anita Challen.
The ATO also advises Australians to be wary of information from AI platforms and social media ‘finfluencers’ who may promote shortcuts or hacks that claim to increase tax refunds.
Even tips from well-meaning family and friends should be treated with caution, the ATO says.
“In reality, all taxpayers can be affected by misinformation,” Challen told SBS News. “Even highly tax literate or educated people can get caught out.”
Other groups have also warned of misinformation being spread online at tax time.
“If you see a TikTok account suggesting you claim your dog as a legitimate expense this tax time, it’s probably time to put down your phone,” Certified Practising Accountants Australia said last year.
People are ultimately responsible for their own tax returns, the ATO says, and those who act on misleading advice risk hefty penalties.
“Taxpayers remain accountable for ensuring the information they or their agents provide to the ATO is accurate — whether the advice came from a friend, online sources, or if AI tools were used in its preparation,” Challen said.
“Getting it right upfront prevents delays, incorrect claims and the need for amendments or ATO compliance action.”
Penalties range from 25 to 75 per cent of underpaid tax for false or misleading claims, while poor record-keeping can lead to denied deductions, penalties and interest. In serious cases of deliberate fraud, taxpayers can face substantial penalties and potential criminal charges.
Challen acknowledged that not everyone can afford to see a registered tax agent but said there were options for lower-income earners.
This includes the ATO’s Tax Help program, which is free and helps eligible people earning $70,000 or less a year to lodge their tax return online.
The ATO also has occupation and industry-specific guides on its website that provide advice on what deductions you can claim.
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