The Australian Taxation Office (ATO) remains steadfast in its commitment to ensuring that individuals and businesses adhere to tax laws, holding those who deliberately cheat the system accountable. The ATO provides several tax crime prosecution case studies which highlight the serious consequences faced by those who engage in fraudulent activities.
Omitted income lands former tax agent in trouble
Mr. A, a former tax agent operating as H&I Financial, has been sentenced to 20 months in prison for making false statements in a business activity statement (BAS) and tax return. He was released on a $10,000 recognisance to be of good behaviour for two years.
An audit in 2018 revealed Mr. A understated his income by $386,973 in his 2017 tax return, resulting in a tax shortfall of $194,603.79. He also began reporting GST only from July 2017, despite exceeding the reporting threshold a year earlier. One BAS understated GST on sales by $71,666.
Such shadow economy activities reduce funds for essential public services and create unfair competition for honest businesses. In December 2019, the Tax Practitioners Board deregistered Mr. A for breaching the Tax Agent Service Act 2009.
Restaurateur served with jail term
Mr B, a McLaren Vale restaurateur, has been sentenced to 5 years and 3 months in prison for fraudulently obtaining $613,262 in GST refunds and attempting to obtain an additional $210,333, which was stopped by the ATO. From September 2016 to November 2017, Redman submitted 19 false business activity statements (BAS) that overstated sales and acquisitions for his restaurant and gift shop.
The audit revealed inconsistencies in documents, including a sales summary created in Microsoft Word and a POS report with incorrect dates. Redman also submitted a forged medical document falsely claiming his wife was undergoing cancer treatment.
The magistrate condemned Mr B’s persistent and deliberate fraud, sentencing him to over five years in prison with a non-parole period of three years. He must also pay $599,122 in reparations.
5 years jail for serial GST fraudster
Mrs C, a Queensland woman, has been sentenced to 5 years in prison, with a non-parole period of 20 months, for attempting to fraudulently obtain over $650,000 in GST refunds and other offences. Mrs C used inactive ABNs to file false GST input tax credit claims. Although some early claims were paid, ATO audits found no evidence that she was operating a business, leading to the disallowance of her claims and cancellation of her GST registration. Despite this, Mrs C repeatedly reactivated her GST registration and continued making false claims, ultimately obtaining over $150,000 and attempting to claim an additional $500,000.
Property owner digs himself into a hole
Mr D from South Australia has received a criminal conviction and a $1,500 fine, along with $699.30 in reparation, for providing false documents to an ATO auditor regarding deductions for his rental property. An audit of Mr D’s 2018 tax return revealed unusually high deductions for gardening repairs and maintenance. When asked for details, he provided photos of tax invoices for a skip bin hire and tree removal.
However, discrepancies were found when the ATO contacted the service provider. The original invoice showed a $210 charge for the skip bin, while Mr D’s submitted invoice showed $1,090, with an additional $1,000 added for tree removal.
Mr D was charged with two counts of incorrectly keeping records with the intent to deceive or mislead a Commonwealth public official.
False claims land swimming teacher in hot water
Mrs E, a former swimming teacher, has been sentenced to 3 years in jail for fraudulently obtaining and attempting to obtain over $250,000 in GST refunds. Mrs E filed multiple false business activity statements for her swim school, overstating purchase amounts to gain financial advantage. She received $97,114 in fraudulent refunds and attempted to secure an additional $181,947, which was stopped by the ATO.
Mrs E will be released after 15 months on a $1,000 recognisance, requiring her to be of good behaviour for 2 years. She was also ordered to repay the $97,114. The judge highlighted the extended period of deception and dishonesty.
Key takeaways
These cases illustrate the ATO’s rigorous efforts to combat tax fraud and maintain the integrity of Australia’s tax system. By holding individuals accountable for their actions, the ATO ensures that those who comply with the law are not disadvantaged, reinforcing the importance of honesty and compliance in supporting public services and fair competition.
