Serious fraud and the ATO

Many clients rightfully seek ways to minimise their tax. Sadly, what was legal before may not be legal now. Or some clients shun the support of their professional advisers and enter into unlicensed promoter-driven schemes. Income is diverted overseas to a tax haven via the payment of a dubious invoice. Sometimes money is sent off shore and comes back – “round robin”. The money comes back magically as a loan. To keep under the Austrac radar debit cards are used. It all looks glamorous and legitimate.

For a while, for some people a life time, the transactions go unnoticed. Huge amounts of tax are saved. Then the ATO comes a knocking. This is more common because of heightened sensitivity to terrorist attack.

How does the ATO find out?

The ATO is not stupid. It knows you don’t want to pay tax. It watches money moving off-shore.

Often the ATO gets lucky: a “blind” field audit, business review, investigation or audit can provide a windfall. It is best to come clean before the ATO notices you. If you are noticed and you feel you have done nothing wrong put a strong foot forward immediately.

From what we are seeing, it is inevitable that these transactions are discovered. ATO warning signs are: low salaries with expensive holidays, homes, and private schools. If you purchased a Range Rover or boat, the ATO are data matching you, as you read this. Voluntary disclosure dramatically reduces the risk of being prosecuted and going to gaol.

Why see a tax litigation team early?

It is unwise to ignore the ATO and tough it out. A better course of action is for your tax litigation team to work with your professional advisers. We work on your tax non-compliance and restrict penalties and interest.

It takes your entire team – tax lawyer, accountant and adviser – to set up a strategy. The team approach is required because the area is complex touching on both civil and sometimes criminal law.

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