Proof required for work-related claims

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People who lodge false work-related expenses are in the Australian Tax Office's sights, and those thinking of hiding behind their tax agent when they get caught had better think twice.

That is the warning from the ATO as millions of Australian workers prepare to lodge their tax returns for the 2018-2019 financial year.

The ATO has issued a timely reminder about false work-related claims after an Adelaide doctor was recently convicted for fraudulently claiming work-related expenses.

The 37-year-old was convicted of criminal offences for fraudulently claiming wedding expenses as work-related deductions in his and his wife's tax returns.

The doctor was convicted in the Adelaide Magistrates Court for fraudulently obtaining and attempting to obtain a financial advantage of more than $58,000 from the ATO and was ordered to pay a $14,000 fine.

In his 2015 tax return, the doctor fraudulently claimed $33,087 in work-related deductions for an overseas conference he did not attend - the expenses actually related to his wedding.

Based on the information provided in his return he received a tax refund of $20,017.

That same year he also provided false information to obtain a tax refund for his wife. She claimed a work-related deduction of $25,259 for the same overseas conference in an attempt to obtain a refund of $15,641 to which she was not entitled to, but the ATO intervened before this refund was paid.

In October 2015, the ATO initiated an audit of the wife's tax return after data matching indicated her deductions were unusually high compared with similar taxpayers of a similar occupation.

During the audit, the ATO approached the couple's tax agent requesting evidence to substantiate the wife's deductions, and the doctor produced false documents to justify the claims.

In addition, the ATO accessed immigration data and information from the conference organisers which indicated the wife's claims were false. The doctor was also prosecuted for false work-related expenses he claimed in his return, even though he voluntarily amended the return after the audit of his wife.

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Assistant Commissioner Peter Vujanic said it was astounding anyone thought they could get away with such brazen fraud against the tax system.

"This case also serves as an important reminder that you can't outsource responsibility for your tax return. Regardless of who assists in the preparation of your tax return it is ultimately your responsibility," he said.

"Even if you lodge through a tax agent your claims must be legitimate and you must be able to justify them if asked to by the ATO.

"If you intend to push the boundaries, or perhaps fudge some parts of your return, the ATO has you in its sights."

The ATO has previously warned scrutinising work-related expenses is a priority area. In 2017, some 6.7 million taxpayers claimed a record $7.9 billion in deductions for 'other work-related expenses'. This can include claiming the cost of attending seminars or conferences that are sufficiently connected to work activities.

The ATO has produced a series of guides for specific industries and occupations to help taxpayers to correctly report their income and allowances, and claim deductions for work-related expenses they are entitled to.

The guides cover a broad range of occupations from medical professionals to police, teachers, adult industry workers, cleaners, flight attendants and plumbing, mechanical and electrical trades.