The Phoenix Taskforce, established in 2014, is a unified initiative bringing together federal, state, and territory agencies to detect, deter, and disrupt illegal phoenix activity in Australia. The taskforce employs a multifaceted approach to address this pervasive issue, providing education, enforcement, and strategic actions to protect businesses and the economy.
About the Phoenix Taskforce
Illegal phoenixing involves the deliberate liquidation of a company to avoid paying debts, taxes, and employee entitlements, only to emerge anew and continue operations under a different guise. The Phoenix Taskforce was formed to combat this unethical practice through a combination of education, advice, and enforcement.
The taskforce works closely with various industries and supply chains to eliminate opportunities for illegal phoenix activity. By sharing information and utilising sophisticated data-matching tools, the taskforce can identify and target those who engage in or promote such activities.
Key actions taken by the taskforce include:
- Disrupting business models to render them financially unviable
- Removing the ability of phoenix operators to conduct business
- Imposing financial penalties
- Prosecuting the most egregious offenders
Severe cases are referred to the Serious Financial Crime Taskforce for further investigation. Offenders face civil and criminal penalties, particularly for asset concealment from creditors during company wind-ups. ASIC and liquidators have additional powers to recover assets for creditors’ benefit.
When phoenix activity is suspected, the taskforce can estimate liabilities, make directors personally liable under the director penalty regime, and withhold refunds from non-compliant businesses. The director identification number (director ID) initiative further helps prevent fraudulent identities and aids in tracing directors’ activities over time.
Additional funding and enhanced capabilities
In partnership with ASIC, the taskforce has received additional funding to target facilitators and pre-insolvency advisers more effectively. Improved data-sharing and analytical capabilities have been established to enhance the compliance program targeting individuals promoting illegal phoenix activity.
Phoenix Taskforce Results
As of 31 March 2024, the taskforce has raised over $2.25 billion in liabilities from audits and reviews, and returned more than $1 billion to the community.
Achievements for 2022–23
- Completed 2,967 audits and reviews
- Collected over $107 million in cash
- Received over 2,500 referrals of suspected illegal phoenix activity through the Tax Integrity Centre
- Banned or disqualified 5 directors from managing corporations
- Shared 567 disclosures of information between agencies
Cumulative Achievements Since 2014
- Conducted over 12,336 audits and reviews
- Received more than 14,316 tip-offs
- Investigated over 5,295 referrals through the Tax Integrity Centre
- Banned or disqualified over 100 directors
- Successfully prosecuted 27 criminal matters related to illegal phoenix activity
Phoenix Taskforce Members
The Phoenix Taskforce comprises numerous key agencies from across federal, state, and territory governments, including:
- Australian Taxation Office (ATO)
- Australian Securities & Investments Commission (ASIC)
- Australian Federal Police (AFP)
- Australian Border Force (ABF)
- Fair Work Ombudsman
- Various state and territory revenue offices and regulatory bodies
This extensive collaboration enhances the taskforce’s ability to effectively combat illegal phoenix activity through shared resources, intelligence, and coordinated actions.
Reporting and compliance
The taskforce encourages the public to report suspected illegal phoenix activity anonymously. This collaborative and transparent approach ensures the integrity of the business environment in Australia.
Key takeaways
The Phoenix Taskforce exemplifies the effectiveness of inter-agency collaboration in tackling illegal phoenix activity. Through comprehensive education, enforcement, and strategic measures, the taskforce not only disrupts unethical business practices but also protects the Australian economy. Their continued efforts and significant achievements highlight the importance of cooperation in ensuring a fair and transparent business environment.
