I believe there are now two great Australian dreams – the dream of home ownership, and the annual dream of a Tax Refund.

As it is tax time, this is a topical subject. Now into my 22^nd tax season, I mentally prepare myself for all the weird and wonderful tax deductions concocted at the pub and weekend BBQ’s. “My friend claimed this”, “I was told that this was deductible”, “my mate’s accountant claims this for her”, “I know someone who got a $X refund”.

Same thing every year. The armchair tax experts come out in force because their car rego is due and their refund needs to cover it, or they are going on a holiday, and the refund is “meant to” cover the flight. Someone has a credit card debt that they want the refund to pay off. These are all things I have directly heard from (generally former) clients, who were none too pleased when I told them that the car rego / trip / credit card debt bore no correlation to the quantum of the Tax Refund.

I have told countless people to go find another accountant who will start with the desired refund and work the deductions backwards from there. I have been saying for 10 years that the ATO will catch up with all this. I have had many clients take my advice and come back a couple of years down the track with horror stories of all their mates who were made to pay back-taxes because the accountant who was claiming these bullshit expenses for their mates got caught, and all the clients were reviewed. Funny enough when the ATO gets onto something like this, they are not too keen to negotiate, not on penalties and interest charge, and not on repayment terms.

Let’s bear in mind that the time has definitely come - data matching, benchmarking, auto generated reports all mean that it is now easier than ever for the ATO to review for inconsistencies and outliers.

You must have heard the ATO banging on about individuals overclaiming on clothing expenses, motor vehicles, other work related expenses, and if you haven’t, listen up, because they are gunning for you. The ATO sees this as a possible $8.7 Billion (yep, billion) in revenue is being missed by the government coffers due to overclaims made by individual taxpayers.

Chris Jordan (Commissioner of Taxation) and his band of merry men and women are on the attack, and every individual taxpayer is potentially in the firing line. Sure, you are going to have a dodgy mate or two who are going to get away with it for a little longer, but don’t be tempted by the bright lights of a refund, it is likely to come back to bite you on the bum. These guys have personal Tax Returns in their sights and now have the technology and resources to take it on.

TC’s tips for a sensible approach to tax-time:

• If you didn’t have to pay for it because your employer kindly did so, fantastic - consider yourself lucky, and just don’t claim it
• Don’t be the fool who chases tax deductions by paying for something when work will pay, or you don’t need it, but you apparently need the tax deduction – to get a deduction you are always worse off – if you spend $1, the best you are going to get is 49c back
• Don’t think you can just claim “last year + 10%” – you can claim what you spend, or in some cases, make a claim at an ATO determined rate
• If some clown is spouting tax advice you at 2am after 1,000 schooners/Midori spritzers, bear in mind that a qualified accountant or Tax Agent probably actually does know more than they do, even if you prefer your mate’s version of events
• If you earned the same amount each week for the year with no dramatic increase or decrease in pay and little other income, then you are unlikely to get a refund – because you have been taxed appropriately on a weekly/monthly basis
• If you do not get your dream refund to cover your holiday/car rego – congratulations, you were not overtaxed during the year!! This is good news, you have had full use of all your money during the year
• If you have a simple Tax Return, do it on MyGov – this works really well, and does not cost
• If you have a more complex Tax Return or actually want some advice, see a reputable accountant/Tax Agent, and listen to their advice

I hate to be the fun police, but for me, the sooner we are rid of personal Tax Returns that don’t have more than $1,000 in other income or deductions, the better. I am running out of tissues for disappointed clients, and I can’t bear to think about all the forests that are being cut down to make all the boxes of tissues.