The Australian Taxation Office is taking advantage of its new IT systems to detect rorts in the cash economy, with eBay sellers identified as a target.
The ATO now has access to forms of advanced data-matching through its new IT systems, worth more than $756 million.
The system enables the ATO to match reported income against records collected by banks, Centrelink and other organisations. Last year, the ATO checked 500 million records gathered from third parties like eBay.
The renewed attack on the cash economy aims to recover millions of dollars in unreported liabilities. In 2010, the ATO recovered more than $214 million.
According to tax commissioner Michael D’Ascenzo, the ATO is confident it has enough data available to risk-assess the 1.4 million businesses with the potential to under-report their cash income.
In addition to the rigorous IT system, the ATO has applied controversial cash benchmarks to about 600,000 new businesses across more than 100 industries, including building and construction, food services, healthcare and manufacturing.
The benchmarks map what the ATO considers the expected level of cash sales, and other performance measures such as the cost of materials compared with turnover. Of the 600,000 businesses assessed in the latest crackdown, 46,000 fell outside the benchmarks.
The crackdown has also exposed sellers on online auction site eBay, and Ascenzo says the ATO will follow up 2,200 sellers identified with under-reported income compared with eBay records.
Among those are 235 sellers who may have under-reported their incomes by $100,000 or more.
ATO assistant commissioner Paul McKenzie has said the issue of eBay sales not being declared as income is an issue, as is the uncertainty around whether organisations that provide data to the ATO have an obligation to advise their clients of this.
McKenzie says because people are anonymous when they use eBay, the data does not have any tax file numbers associated with it, and there are currently no obligations in the tax legislation that require organisations to advise they are providing data to the ATO.