Each year the ATO publishes the areas it will be paying closest attention to at tax time, and while the themes rarely change dramatically, the enforcement capability behind them keeps growing. For 2026 the ATO has named two primary focus areas, work-related deductions and omitted income, alongside sharper attention on rental properties and a notable new warning about where taxpayers are getting their tax advice. The themes will look familiar to any practitioner, but the difference this year is the breadth and precision of the data the ATO now cross-checks against, which means the old assumption that a small omission will slip through is increasingly wrong. For firms, this is useful both as a client-communication prompt and as a reminder of where the review effort should sit before lodgement.
The two named priorities, and the rental property spotlight
Work-related deductions are again the headline focus, and the ATO's framing is worth passing to clients verbatim because it is the test every claim has to pass. There are three golden rules: the expense must directly relate to earning the income, the client must have spent the money themselves without being reimbursed, and the claim must be supported by a record such as a receipt, invoice, or logbook. The most common failures are overclaiming and poor apportionment, where a genuinely mixed expense is claimed in full rather than split for private use. Working-from-home claims sit inside this and are a perennial problem, particularly double-dipping, where someone claims electricity or internet separately while also using the fixed-rate method that already covers them, and the fixed-rate method requires contemporaneous records of hours worked, not a year-end estimate. Worth noting on the other side of the ledger: the ATO also encourages people to claim what they are genuinely entitled to, and its occupation-specific guides list legitimate but less obvious deductions, so accuracy cuts both ways.
Omitted income is the second named priority, and this is where the ATO's data reach is most visible. Every income source has to be declared, including the ones clients most often forget: side hustles, cash jobs, bank interest, dividends, and rental income. Because the ATO now matches against employers, banks, share registries, digital and gig-economy platforms, and cryptocurrency exchanges, an undeclared stream is far more likely to surface as a discrepancy than to go unnoticed. Rental property has its own spotlight for 2026, with updated ATO guidance on holiday homes and mixed-use properties. The focus is on properties claimed as available for rent but also used privately by the owner or family, where deductions may need to be reduced or denied unless the client can show a genuine commercial intention to earn rental income. For firms with property-investor clients, this is one of the more significant review points of the season.
The new warning: AI, finfluencers, and who is actually responsible
The genuinely new note for 2026 is the ATO's warning about where taxpayers source tax advice. It has specifically cautioned against acting on tips from AI chatbots, social media finfluencers, and even well-meaning friends and family, and the reasoning is worth understanding precisely because it is not a blanket dismissal of technology. The ATO's point about general AI tools is that they draw on a broad and inconsistent range of sources, which can include overseas tax rules or outdated Australian information, so a general-purpose chatbot answering a question about a BAS or a deduction may confidently return something that is simply wrong for the current Australian rules. On finfluencers, the concern is unqualified advice promising bigger refunds, shortcuts, or hacks, at a time when ASIC has been issuing warning notices to social media creators for misleading financial content. The through-line the ATO keeps returning to is accountability: the taxpayer remains responsible for what is on their return regardless of where the advice came from, whether a mate, a website, or a chatbot, and penalties can apply where a claim cannot be substantiated.
For a firm, this warning is less a threat than a validation of the role. The ATO's recommended reliable sources are its own website, its app, and a registered tax professional, which is precisely the value a firm provides, judgement grounded in current Australian rules with accountability attached. The distinction that matters, and one worth making clearly with clients, is between a general chatbot guessing at tax law from a global mix of sources and purpose-built software trained on Australian rules with a registered professional reviewing the output. The first is what the ATO is warning about. The second, where the human accountant retains the final say on every position, is the opposite of guesswork. AI used well in a practice is a tool that does the repetitive work and surfaces it for professional review, not a source of unverified advice, and that human review is exactly what keeps a return defensible.
What firms should do with this before lodgement
The practical response follows directly from the focus areas, and it is mostly about front-loading the review that the ATO's data-matching would otherwise do after the fact. For work-related and WFH claims, confirm the client has the records to support each claim and that mixed expenses are properly apportioned rather than claimed in full, because an unsupported claim is the single most common trigger. For income, cross-check declared income against the third-party data the ATO already holds, especially for clients with side hustles, gig-economy work, crypto, or investment income, so a discrepancy is caught in the firm rather than by the ATO. For property investors, revisit any holiday-home or mixed-use property against the updated guidance and confirm genuine commercial intent and correct apportionment. And there is a timing point the ATO itself stresses: early lodgers make more mistakes because pre-fill data is not yet complete, so waiting until the ATO's pre-fill has finalised, generally later in July, produces a cleaner return than rushing to lodge on 1 July. Across all of it, the message to clients is the ATO's own: pause, check, and use a trusted source, so the return only has to be done once. That discipline, applied before lodgement rather than after a review letter, is exactly what a firm is for this time of year.
