eBay, Trading Post help catch tax cheats

The Australian Taxation Office (ATO) is enlisting the help of eBay and the Trading Post to carry out data matching to weed out businesses and individuals evading their taxes.

The ATO is looking for eBay and Trading Post users who have under-reported income generated from online sales.(Looking for clues image by Casey Fleser, CC2.0)

Businesses that have sold more than $20,000 in goods and services online would be subject to the matching process.

Senior assistant commissioner Chris Barlow told ZDNet Australia that the tax office was currently receiving approximately 30,000 online account records from eBay and the Trading Post for matching.

Once the tax office has received the records from eBay and the Trading Post, it will commence matching the data against tax returns. Computers carry out automatic checks first and then if a match is made, the system flags it for an ATO employee to follow-up.

"We match around 500 million data records every year from various professions," said Barlow.

He told ZDNet Australia that the ATO takes privacy and security issues very seriously when dealing with personal financial information.

"Data which does not lead to a match is destroyed as soon as practical and is disposed of no later than 90 days after the data-matching process has been performed. Data which leads to a match and where a decision of no further action is reached, data is destroyed 14 days [after the fact]," detailed Barlow.

Businesses or individuals that are suspected of dodging their tax requirements will be questioned by the ATO.

If it is confirmed that the business is under-reporting its income, it will attract a fine of up to 75 per cent of its original tax bill.

Barlow said that while the data-matching process was a way to find those who are dodging their tax requirements, it was also an opportunity for businesses and individuals to self-check their records.

"If they come forward before we contact them, there is a very significant concession as far as the penalty is concerned," Barlow added.

Tax commissioner Michael D'Ascenzo said in a statement that the data-matching program helps to ensure that there is a level playing field so that businesses doing the right thing are not disadvantaged.

The ATO is constantly assessing professions which it feels would be best served by a data-matching process in its efforts to combat the cash economy.