"Outrageous" deductions rejected

September 2019

The ATO has published some of the most unusual claims that they disallowed last financial year.

Nearly 700,000 taxpayers claimed almost $2 billion of ‘other’ expenses, but the ATO's systematic review of claims had found, and disallowed, some very unusual expenses, including:

  • claims for Lego sets bought as gifts for children, and sporting equipment or membership fees for their child athletes;
  • claims for dental expenses ("believing a nice smile was essential to finding a job");
  • some taxpayers tried to claim the purchase of a brand new car (in excess of $20,000 each!), with one "particularly charitable" taxpayer trying to claim for a car purchased as a gift for their mother;
  • one taxpayer made a claim for "the cost of raising twins", while another claimed for the "cost of raising three children" (and another taxpayer was obviously shocked at the cost of having children, simply stating "New born baby expensive" when making their claim);
  • other taxpayers claimed child support payments, private school fees, school uniforms, before school care and other school expenses, as well as health insurance costs and medical expenses; and
  • one taxpayer decided to claim the cost of their wedding reception.

The ‘other’ deductions section of the tax return is for expenses incurred in earning income that don’t appear elsewhere on the return — such as income protection and sickness insurance premiums.

The ATO is reminding taxpayers that, in order to claim an ‘other’ deduction, the expenses must be directly related to earning income and they need to have a receipt or record of the expense.

EDITOR'S NOTE

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