It was reported in the Australian Financial Review today (20 January 2016) that the Australian Taxation Office (ATO) has confirmed that it is investigating wealthy individuals who have purchased expensive boats, planes, cars, art and thoroughbred horses by requesting information from their insurers. The ATO has launched a data matching program through which it will identify and contact insurers seeking information about policy holders who insure valuable assets. It is expected that the ATO will issue notices to insurers next month.

The ATO has wide statutory powers to collect information for data-matching projects designed to address specific industries, issues or risks. These powers are set out in Division 353 of Schedule 1 to the Taxation Administration Act 1953 (Cth) (previously these powers were held under sections 263 and 264 of the Income Tax Assessment Act 1936 (Cth) and the notices served under those provisions were known as Section 263 and 264 Notices). These powers enable the ATO to serve a written notice requiring a person or organisation to:

  • give the ATO any information it requires for the purpose of the administration or operation of a taxation law;
  • to attend and give evidence for the purpose of the administration of a taxation law;
  • to produce any documents in that person’s/organisation’s control for the purpose of the administration or operation of a taxation law.

Failure to comply with such a notice is an offence. However, the ATO’s decision to issue a notice is reviewable by the Federal Court.

You can read more about the ATO’s data matching protocols and powers to collect information here: