The Australian Taxation Office “ATO” has now commenced the automatic sharing of bank information with the Internal Revenue Service “IRS” (the ATO’s equivalent in the United States “US”). This is the first of many exchanges of information expected to automatically flow over the coming months and years. In this instance, details of over 30,000 financial accounts worth more than $5 billion held by US citizens and tax residents has been provided to the IRS.
In return, the ATO will receive data from the IRS about Australians with financial accounts in the US. This data can then be used to detect undeclared offshore income and tax evasion.
Originally announced in March 2014, the ATO now expects to automatically exchange financial account information with almost 100 different countries by 2017. During 2014-15 the ATO engaged in 519 exchanges of information resulting in total tax liabilities of $255 million (up from $250 million in 2013-14).