The ATO has developed work-related expenses risk profiles to help identify how work-related expense (WRE) deduction amounts compare for similar taxpayers. According to the ATO, 8.4 million taxpayers claimed a total of $21.3 billion in WREs in 2015, and the amounts claimed continue to grow.

Complex rules and uncertainty about their applicability to individual circumstances can make WRE entitlements difficult to understand, so it is an area where taxpayers often make mistakes. While the amounts mistakenly claimed are relatively small at an individual level, collectively the overall impact can be significant.

According to the ATO, improvements in data analytics and modelling have allowed it to create risk profiles for tax agents' practices based on a comparison of their clients' WRE claims with those made by similar taxpayers.

Over the next few months, the ATO says it will share these risk profiles with some tax professionals where their clients' claims appear higher than expected. This doesn't necessarily mean these tax professionals are doing anything wrong – the ATO says risk profile is just one of the factors it will use to monitor WRE claims.

Source: ATO, Work-related expenses risk profiles, 29 November 2016,