ATO pilot triggered eBay sellers investigation

A successful pilot program targeting non-compliant online sellers by the Australian Tax Office triggered the government body to launch a full blown investigation into the practice, it has been revealed.

The pilot was based on assessments of random eBay and Trading Post sellers over the past 18 months. Although the ATO's senior assistant commissioner Chris Barlow described it as a "small pilot", it gave enough cause for the Tax Office to expand it.

"We certainly haven't drawn any strong conclusions about the level of non-compliance" from the pilot, Barlow said.

As for the number of IT hardware and software cases the pilot may have discovered, Barlow said "there wasn't a large number", but he was unable to give a more detailed industry breakdown.

Under the Income Tax Assessment Act the ATO has the power to gather credit card information, ABN details, dates of birth and more. In this case neither eBay or the Trading Post volunteered to give up this information - they were compelled to, Barlow said.

"It's part of our broad strategy of data matching where we look for new sources of information that would help us identify areas of non-compliance," he said. "Last year we matched 500 million data items over a year [in other schemes]. It's a very substantial program."

The online sellers program targets individuals and businesses that sell $20,000 or more using eBay or the Trading Post. It avoids targeting "mums and dads that are selling the mower" and targets sellers that hide under the guise of multiple identities. 

"We do believe that there is potential for people to use multiple registrations, so they register a number of times under different identities. They might be making significant sales. So obviously making $20,000 you'd have to set up multiple different identities to avoid being picked up in the data matching," he said.

The project will most likely take 18 months until it's finalised and reviewed.

"The message we'd like to get out there is that it's not too late for people to come forward and make a voluntary disclosure," Barlow said.