Program objectives
Our data-matching programs help us fulfil our responsibility to protect public revenue and maintain community confidence in the integrity of the tax and super systems.
The objectives of the IPI data-matching program are to:
- help ensure that individuals and businesses are fulfilling their tax and super reporting obligations
- identify and educate individuals and businesses who may be failing to meet their registration or lodgment obligations and help them
- lodge their income tax returns
- correctly report assessable income from an IPI claim at label 1 Salary or wages, or label 24 Other income in their individual income tax return
- correctly report deductible premiums paid towards an IPI policy at label D15 Other deductions in their individual income tax return
- gain insights to help develop and implement strategies to improve voluntary compliance. This may include educational or compliance activities for individuals and businesses who own, or are insured by an IPI policy
- promote voluntary compliance and increase community confidence in the integrity of the tax and super systems.
Why we look at this data
Sample audits across the individuals (not in business) population were undertaken by the Random Enquiry ProgramExternal Link. They reveal the tax gap for the 2020 financial year was $9.0 billion, or 5.6%. We estimate that $2.1 billion of the tax gap is attributable to unreported income.
In 2021, we acquired a small sample of IPI premium and claim data from insurance providers to assess the tax consequences associated with the incorrect reporting of income (claim) and deductions (premium) by individual taxpayers. Assessment outcomes reveal that most individuals with a claim incorrectly reported the relevant assessable income in their tax return, some omitting the payment completely. Adversely, most individuals incorrectly claimed their deduction premium towards an IPI policy.
Acquiring IPI data significantly enhances our ability to identify, assess and treat taxation risks associated with the Individual population, such as:
- the incorrect reporting of assessable income derived from an IPI claim. This includes where value discrepancies exist, or incorrect label reporting has occurred in income tax returns.
- the incorrect claiming of premium deductions paid towards an IPI policy. This includes instances where there is no deduction entitlement, value discrepancies exist, or incorrect label reporting has occurred in income tax returns.
For more information on:
- IPI income you are needing to declare, see Income you must declare.
- IPI deductions you can claim, see Income protection insurance.