With the tax season in full
swing and many taxpayers dreaming of what to spend their tax refunds on, I
thought I would put together some tax time tips for Crikey readers to help them
pass the prying eyes of the Uncle Scrooges in the tax office. And just for fun I thought it would be a good
opportunity to look back on some of the more bizarre tax deductions people have claimed over the years.

But firstly the
business stuff. Tax
Commissioner Michael D’Ascenzo announced the opening of
the annual tax cheat hunting season last week with the over-taxed and over-worked salary and wage earners under his
microscope once again. This
year the Tax Office will focus on:

  • business
  • hospitality
    industry service workers
  • factory,
    store and process workers
  • mechanical,
    automotive and electrical tradespersons
  • information
    technology professionals, and
  • mining
    site employees.

D’Ascenzo said the Tax Office was again focusing on deductions for rental
property expenses, capital gains from the sale of property and other assets and
work-related expenses. “We’ll be looking
at deductions for motor vehicles, self-education, home-office and travel
expenses”, he said.

Here are my tax time tips
especially for Crikey individual taxpayers:

  • Although you must have
    receipts for claims in excess of $300, generally the ATO will not audit someone
    whose claims for deductions are under $1,000.
    However this doesn’t apply to those occupational groups mentioned on the
    hit list above. Last year the
    Commissioner wrote to nearly four hundred thousand individual taxpayers warning
    them they must have documentation to support their claims. If you get one of those silly letters from Mr
    D’Ascenzo saying that you have come under notice for claiming large deductions,
    screw it up and throw it in the bin. It
    is merely a scare tactic by the ATO to stop you from claiming what you are
    entitled to.
  • The ATO receives information
    from Centrelink, financial institutions and companies regarding any taxable
    pension or benefit, interest earned from your investments and dividends from
    your investments. So make sure you
    declare them or you will be caught!
  • Don’t claim on expenses
    already reimbursed by your employer. The
    ATO doesn’t like this!
  • If you claim deductions for
    a rental property the ATO always zeroes in on your claim for repairs to the
    property. This is because many people
    incorrectly claim for improvements which are more than just repairs – have a look at the ATO website for more info.

Now for some light
relief! Here are the top ten most bizarre
tax deductions I encountered when I worked in the ATO:

A cat burglar claimed
abseiling equipment, special gloves and aerobic gym

A businessman’s claim for
reference books turned out to be a subscription for Phantom comic

A gigolo claimed a
p-nis enlargement contraption.

A Qantas pilot claimed
losses on two rental properties to reduce his substantial income. Only problem was the properties didn’t
exist. It was all fictitious!

Drug dealers claimed
plastic bags to put their deals in as well as elaborate weight measuring devices
and bribes to police.

A s-x worker claimed for
s-x toys, medical
appliances, whips and chains she uses during special
sessions with clients.

An ATO auditor claimed
hats and sunglasses to protect him from ultraviolet rays travelling between
audit jobs

Builders claimed bribes to
local councillors to get their development applications

Police claimed payments to
informants for information in helping them solve crimes.

Politicians claimed
cosmetic surgery to enhance their careers.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey