Tax time has rolled around again, and one question that comes up every year is:

What is the ATO going to be looking at this time?

For the 2026 financial year, my view is that this will be less about randomly checking tax returns and more about data matching.

The ATO already receives enormous amounts of information from banks, employers, share registries, crypto platforms, rental platforms, contractors and overseas reporting systems.

So the question is no longer simply:

“Did you lodge your tax return?”

It is increasingly:

“Does your tax return match the information the ATO already has?”

1. Omitted income

This is probably the most obvious starting point.

The ATO may already have information relating to:

• crypto transactions
• share sales
• rental income
• share economy income
• contractor income reported through TPAR
• foreign income
• residency-related matters

In simple terms, if money came in or an asset was sold, there is a fair chance somebody else has reported information about it.

That does not necessarily mean the ATO knows the correct tax treatment.

But it may know that the transaction happened.

2. Work-related deductions

This one never really goes away.

Areas likely to receive attention include:

• working-from-home expenses
• motor vehicle claims
• travel
• uniforms and protective clothing
• self-education
• larger deductions that appear unusual for the taxpayer’s occupation

The important point is not whether the claim sounds reasonable.

It is whether you can substantiate it.

A genuine deduction with poor records can still create unnecessary problems.

3. Rental properties

Rental properties remain an obvious area of focus because there are plenty of opportunities for genuine mistakes.

Common areas include:

• interest deductions
• mixed-purpose loans and redraws
• repairs versus capital improvements
• Airbnb and holiday rental income
• periods of private use
• capital gains tax when the property is eventually sold

This is where good record keeping can save an enormous amount of pain later.

Keep loan statements, settlement documents, invoices, correspondence and notes explaining significant transactions.

4. Holiday homes and mixed-use properties

A property can be both an investment and somewhere the family uses privately.

There is nothing unusual about that.

The issue is making sure the deductions reflect the actual use of the property.

If a holiday home is rented for part of the year but used privately at other times, expenses generally need to be properly apportioned.

Simply saying that the property was “available for rent” does not automatically mean every dollar of expenditure is deductible.

5. Private companies and trusts

For business owners and family groups, expect continued attention around money moving between entities and individuals.

That may include:

• Division 7A loans
• business funds used personally
• trust distributions
• Section 100A issues
• unpaid present entitlements
• whether documentation reflects what actually occurred

None of these areas are new.

The issue is usually making sure the paperwork and the accounting records tell the same story.

6. Property development

Property transactions can become complicated very quickly.

One of the major questions is whether a profit is taxed on capital account or revenue account.

That distinction can materially change the tax outcome.

Areas that can attract attention include:

• subdivisions
• developments
• GST
• the margin scheme
• the taxpayer’s intention when the property was acquired and developed

This is another area where contemporaneous records can be extremely valuable.

A short file note prepared when a decision is made is generally much better than trying to reconstruct somebody’s intentions three years later.

The real issue: can you prove what happened?

The common theme across all of these areas is not that the ATO assumes everybody is doing something wrong.

It is that the ATO now has significantly more information available to compare against tax returns.

They are looking for:

• mismatches
• unusual claims
• missing income
• poor records
• transactions where the tax return does not appear to reflect the facts

For most people doing the right thing, that should not be a major concern.

But you still need the records.

A simple practical approach

My preference is pretty simple:

• make notes when significant transactions occur
• keep loan documentation
• retain settlement statements and contracts
• save important emails
• document private versus income-producing use
• keep a clear timeline where transactions are complicated

Ideally, you prepare these records and never need to look at them again.

But if the ATO does ask questions, there is something quite comforting about being able to send across a complete file and say:

“Here are the documents. Have a look.”

Then the ATO can do its job, and hopefully everyone can sleep a little easier.

If you have a complicated transaction, property arrangement or business structure, it is generally much easier to document it properly at the time rather than reconstruct it years later.

What areas do you think cause taxpayers the most trouble when it comes to ATO reviews?

Disclaimer: This article provides general information only and does not take into account your personal circumstances. It is not financial or tax advice. You should seek independent advice from a qualified professional before making decisions about tax, legal or financial planning matters, along with loan structures or entity structure.