ATO tax crime prosecutions

The Australian Taxation Office (ATO) investigates a range of different fraud and tax crimes, which are categorised based on the seriousness of the offence.

On its website, the ATO outlines its approach to summary offences, more serious tax crimes, and the most serious financial crimes.

Insight is provided into which crimes the ATO prosecutes directly, key partner agencies it works with, and prosecution results over the past decade.

 

Summary offences

A summary offence is considered less serious than an indictable offence, which is a serious offence where the maximum penalty imposed can exceed two years.

Under the Tax Administration Act 1953, the ATO prosecutes a range of summary offences, including:

  • Failing to lodge returns or keep records.
  • Making false or misleading statements.
  • Not responding to questions when required.
  • Failing to attend an interview.

 

Results

In 2019-20 there were more than 600 successful prosecutions, resulting in 599 criminal convictions, reparation orders of $172,950 and fines of $4 million.

These results are significantly lower than in previous years, as illustrated below:

 

Summary prosecution results

This decrease is also reflected in the dollar value of reparation orders and fines. For example, in 2015-16 there were reparation orders of over $455,000 and fines of over $11 million; more than double that of 2019-20.

The ATO attributes this decline to health guidelines relating to COVID-19 that affected investigations and court proceedings, and a shifting focus towards maintaining integrity of the government’s stimulus measures.

 

Tax crimes

The ATO also investigates more serious tax-related fraud offences, sometimes in partnership with the Australian Federal Police (AFP).

Unlike summary offences, these crimes are not prosecuted directly by the ATO. Where warranted by available evidence, cases are referred to the Commonwealth Director of Public Prosecutions (CDPP) to consider prosecution.

 

Results

In 2019-20 there were 30 cases, resulting in 26 criminal convictions, 18 custodial sentences and $1.63 million in reparation orders. No fines were issued during the reporting period.

While these results have remained more consistent over the years than those relating to summary prosecutions, there was a significant decrease compared to 2018-19:

 

Tax crime prosecution results

This also applies to reparations orders which were over $8 million in 2018-19, and fines which were almost $35,000.

The reasoning provided for this decrease is the same as that for summary offences.

 

Serious financial crimes

The term “serious financial crime” can be applied to a wide range of activities where financial systems are exploited, including fraud, stock market manipulation and money laundering.

These matters are dealt with by the Serious Financial Crime Taskforce, which is comprised of multiple agencies including the ATO, AFP, CDPP, Australian Criminal Intelligence Commission (ACIC), and the Australian Transaction Reports and Analysis Centre (AUSTRAC).

 

Results

From its commencement on 1 July 2015 until 30 Sept. 2020, the taskforce has progressed cases that have resulted in:

  • Completion of 1,258 audits and reviews.
  • Conviction and sentencing of 11 people.
  • Raising liabilities of $972 million.
  • Collecting $375 million.

 

Conclusion

The ATO investigates a wide range of offences, from failing to keep records to international fraud and money laundering.

The ATO directly prosecutes the less objectively serious summary offences, while referring more serious tax crimes to the CDPP for prosecution. The most serious financial crimes are handled by the Serious Financial Crime Taskforce.

There has been a decrease in convictions and prosecutions throughout 2019-20 due to the impact of COVID-19, amongst other factors.

Nyman Gibson Miralis provides expert advice and representation in financial crime matters, including cases involving fraud, tax offences and money laundering.

Contact us if you require assistance.