Hundreds of thousands of Aussie are expected to receive a ‘please explain’ letter from the ATO this year as they look to crack down on the $8.7 billion ‘tax gap.’

Work-related claims like dry cleaning and car expenses will be the most scrutinised as well as investment property deductions and earnings from cryptocurrencies and sharing economy platforms like Uber.

H&R Block director of tax communications Mark Chapman said “The ATO has been given additional resourcing by the Government to back up the work they’re doing in relation to noncompliance. I think we’ll see far more audits and more letters in relation to incorrect claims around work-related expenses and property, and we’ll see far more data-matching around cryptocurrency and the sharing economy.”

Chapman went onto say that if a person cannot substantiate the claim ‘you can’t claim it’ and you must have ‘the receipt or invoice or bank statement that proves you incurred the expense.’’

Last year, one taxpayer was fined $12,000 for over-claiming deductions for their holiday home when it was not actually available for rent.