Does Cycling Funds between Banks Trigger an ATO Alert?

peterpeterpumpkin on 20/12/2016 - 14:43

If you're an OzBargainer you've probably held a variety of bank accounts in order to obtain sign-up bonuses, cashbacks and bonus interest rates. Since a lot of these deals require a monthly deposit of $1000 or more for several months it is possible to have had tens of thousands of dollars cycling through a variety of bank accounts.

Apparently the ATO actively seeks out unaccounted income (http://www.itnews.com.au/news/six-ways-the-ato-uses-data-to-…), with $10000+ looking like a common threshold of interest in other cases. While electronic transfers can be shown to cancel each other out, withdrawing and then depositing income might be harder to dissociate from external supplementation.

Has anyone ever been audited by the ATO? And if so, did cycling trigger any alarm bells?

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Comments

  • Sunny84 on 20/12/2016 - 14:46

    Im sure they do

    Recently I moved some money around and my bank contacted me with a list of questions including who deposited xxx amount into my account (my spouse)

    • HeWhoKnows on 21/12/2016 - 10:50
      +1

      Nothing to do with ATO. This is more about security

  • Diji1 on 20/12/2016 - 15:03

    Yes.

    I just ignore the letters and nothing happens.

  • bargainslut on 20/12/2016 - 15:04
    -2

    I'm not sure, this could break the privacy law….

    • [Deactivated] on 20/12/2016 - 15:45
      +2

      No, it does not.

      • bargainslut on 20/12/2016 - 21:25
        -1

        Thanks, like I clearly said i wasn't sure…..

  • railspider on 20/12/2016 - 15:21
    +3

    Even if they did come asking questions, moving money to trigger new account deals is perfectly legitimate behaviour. Just refer them to OzBargain!

    My question for the ATO would be if payments like a sign-up cash bonus/gift-card or AMEX cashback is considered taxable income?

    • BuyoTheCat on 20/12/2016 - 15:45
      +3

      Only if you are a professional bargainer.

      • bluesky on 20/12/2016 - 17:32

        Oh dear, then all of us will be caught. According to someone, we are. And if we deny it, that someone probably yields enough influence, to convince ATO that we are :-)

    • HeWhoKnows on 21/12/2016 - 10:52

      Non- financial bonuses/gifts probably not as they are classed as gifts. However bonus interest - definitely classed as income!

  • [Deactivated] on 20/12/2016 - 15:47
    +2

    It's not really the ATO but AUSTRAC (Australian Transaction Reports and Analysis Centre). ATO probably gets the data from them.

    The $10k threshold is or could be counted across multiple transactions as well.

    • HeWhoKnows on 21/12/2016 - 10:52

      This has more to do with cash deposits.

      • [Deactivated] on 21/12/2016 - 15:15
        +1

        AUSTRAC still is the organization that tracks all transactions and ATO would leverage a subset from them.

  • tsunamisurfer on 20/12/2016 - 16:28
    +2

    There are Anti-Money Laundering rules and measures in place for our financial institutions, not just banks either, also Super institutions.

    Yes 10k is the recognised limit but if there are a regular high amount (<10k) it is also flagged. $50 transfer isn't going to be noticed but weekly $9500 movements may.

    • Pigey on 20/12/2016 - 18:40

      $10k is the cash threshold.

      The amount for suspicious electronic transfers is not really disclosed.

  • RobMel on 20/12/2016 - 18:00

    I could tell you, but would have to silence you thereafter :P

  • Donaldhump on 20/12/2016 - 18:47

    what is ur monthly income is > 10k, are they going to track / give a cr*p every time

  • edy4eva on 20/12/2016 - 19:21

    Cycling moneys between own accounts (assuming all are under one name/TFN or to/from a shortlist of accounts) is not a trigger. The trigger is constant large cash deposits and withdrawals - and before anything these draw the attention of the bank who will want to offer you loans/credit facilities.

  • [Deactivated] on 20/12/2016 - 19:59
    +2

    The ATO will not be triggered for those types of sums. Refer to AUSTRAC's website. Many banks are forced to report suspicious transactions in large sums to the Australian Federal Police. The AFP and ASIO have an entire department setup just to monitor financial transactions moving in and out of the country. There are a lot of secret deals between the banks and ASIO. Once a upon a time, my company was contacted by the AFP to report funny business by foreign nationals who were moving massive sums of money around in Australia.

    Has anyone ever been audited by the ATO?

    Many times. Most of the time they were asking about all our different income streams and where the funds were moving to. This is one of the ways we avoid paying corporate tax. i.e. By shifting revenue to Europe and North America.

  • alxr0101 on 21/12/2016 - 10:27

    No, never audited. Take Ozbargainers' advice - go for it!

    Oh by the way, it's potentially a criminal conviction and forever then being on the ATO radar —assume that eventually it will be data matched.

  • HeWhoKnows on 21/12/2016 - 10:49

    Do the right thing and you have nothing to worry about. Declare your tax file number and any interest you earn. Very simple.

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