Australia Tax Office targets suspect businesses using data mining

The Australian Tax Office will investigate 46,000 businesses for under-reporting sales or evading tax by deliberately shifting transactions to cash.

"The ATO is confident that we have enough data available to us now to risk assess the 1.3 million businesses with the potential to under report their cash income," the ATO said.

"Most businesses are within (their) benchmark and generally we have no reason to be dissatisfied with their compliance," the ATO said in a statement. "Similarly, most tax practitioners have clients who operate within the benchmarks."

However, about 46,000 businesses report earnings outside of their industry benchmarks "and may be subject to additional scrutiny," the ATO said, citing a speech given by tax commissioner Michael D'Ascenzo to the Tax Institute in Brisbane yesterday.

Using data mining, Australia's federal tax authority compared the income levels of 600,000 businesses to the benchmark revenue levels it had previously established with the various industries.

Read more.