The information matching system (IMS) is a critical component of our compliance program. Legislation requires employers, financial institutions, companies, health funds and government agencies to report details of income together with any tax withheld, and other tax-related information to us.
This information, together with other records we hold, is compared to the details you provided on your tax return. If we identify differences, we send you a letter detailing this information, so you can resolve the discrepancy.
Self-assessment system
Australia's tax system works on self-assessment. This means that on your annual tax return, you must show all your assessable income and claim only the deductions and offsets (formerly called rebates) you are entitled to.
Under the self-assessment system, we accept the claims you make on your tax return, usually without adjustment, and issue an assessment notice. Even though we may initially accept your tax return, it may still be subject to further review.
Timing of IMS letters
We can only issue IMS letters after we have received all the relevant information from each organisation. Delays can occur as some organisations take longer to report their information than others.
To ensure the integrity of the tax system, the law provides us with a period when we can review a tax return to ensure its accuracy. We may amend an assessment up to two years (or four years for taxpayers with more complex tax affairs) after tax became due and payable under the assessment. If the avoidance is due to fraud or evasion, there is no time limit on amending the assessment.
Last Modified: Friday, 7 December 2012