Compliance program 2011-12

Work-related expenses

Deductions for work-related expenses have increased by around 16% since 2007 and are one of the largest categories of claims made in tax returns. Advisory letters are being issued to help people understand their tax obligations and correctly claim expenses.

We also have a number of guides for specific occupations. This year we will closely examine claims for deductions made by:

• real estate employees
• carpenters and joiners
• earthmoving plant operators
• flight attendants.

We selected these occupations because of the number of employees and the relatively high amount of work-related expenses being claimed in previous years compared with other similar occupations.

One example we find is that claims for travel deductions by flight attendants are not always correct. Where an amount for travel expenses is included in the salary package of a flight attendant then these payments are not considered to be a bona fide travel allowance, so any deductions for travel expenses need to be fully substantiated.

We will also visit tax agents with clients in these occupations.

The most common mistakes for many occupations include:

• insufficient documentation to support motor vehicle and travel expenses
• incorrectly claiming home office, mobile phone and internet expenses.

Sections within Individuals

• Employees and contractors
• Work-related expenses
• Overseas income
• Pre-filling tax returns
• Information matching
• Refund fraud
• Split loans
• Referrals to the Tax Practitioners Board
• Superannuation
• Executives, directors and other highly paid individuals