Aussies have been dobbing in their fellow countrymen and women in record numbers thanks to a new tax tip-off line.
The Australian Taxation Office (ATO) has revealed it has received almost 60,000 reports from the community regarding “suspected tax evasion, the black economy or illegal phoenix activity” from July 1, 2018 to May 31, 2019.
It’s a record number, and according to an ATO spokeswoman, it’s because of the new tax integrity tip-off line, which makes it easier for ordinary Aussies to report suspected dodgy practices.
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“The Australian community is often wanting to tell us when they see businesses or employers not doing the right thing and getting an unfair advantage,” the spokeswoman said.
“ … and (we) are on track to receive over 70,000 community referrals before the end of this financial year.”
From July 1, the ATO’s new Tax Integrity Centre will make it even easier for people to report businesses they suspect of engaging in illegal phoenix, tax evasion, and black and/or cash economy activities by providing a single point of contact.
Illegal phoenix activity is when a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts, including taxes, creditors and employee entitlements.
The spokeswoman stressed while all tip-offs were taken seriously by the ATO, they would not all result in an audit.
Instead, all information is assessed and referred to experienced staff for review.
“We utilise the tip-off in conjunction with other information to determine if any action is required,” the spokeswoman said.
“The tip-off may only provide part details; this information is still very useful.
“We want to protect honest businesses and are interested in tip-offs people may have about members of the community who may be intentionally doing the wrong thing and gaining an unfair competitive advantage.”
WHEN SHOULD YOU REPORT?
The spokeswoman said the tip-off line was the equivalent of “Crime Stoppers for tax” and was not just limited to tax issues.
Australians are encouraged to also report behaviours such as:
• Demanding or paying for work cash in hand to avoid obligations
• Not reporting or under-reporting income
• Phoenixing — liquidating and re-forming a business to avoid obligations
• Over-claiming deductions, such as paying for home renovations through a business account
“When people assist us by reporting these behaviours they are contributing to tackling the black economy which adversely impacts on the community,” the spokeswoman said.
“We value referrals from the community. Tip-offs help us build a more complete view of risk. “A community tip-off may be the missing piece of the puzzle that we need to finalise an investigation and seek prosecution action to help protect honest taxpayers.
“You may only know part details. This information is still very useful. It helps us understand industry trends and emerging issues and forms part of our engagement strategies.”
2019 HIT LIST
Also on the ATO’s hit list in 2019 are dodgy, work-related claims like dry cleaning and car expenses as well as investment property deductions, earnings from cryptocurrencies and sharing economy platforms like Uber.
Last year, false claims on clothes and laundry bills cost the system $1.5 billion — and so this year, the ATO will be scrutinising those types of claims very closely.
While it’s not against the rules to claim uniforms or laundry costs as part of a tax return, around six million Aussies made those types of claims last year, which the ATO believes proves many of us are “pushing the boundary”.
The tax man will also be scrutinising people who make money through platforms like Uber, Airbnb or Airtasker to make sure people working in the sharing economy are correctly reporting their income and expenses.
The ATO has also announced it will be paying close attention to excessive interest expense claims, such as where property owners have tried to claim borrowing costs on the family home as well as their rental property.
And it is also clamping down on an “unfair” and “illegal” tax loophole some Aussies use to “deliberately hide income”.
The ATO has warned from July 1, unreported “cash in hand” payments made by employers to workers will not be tax deductible.
While cash transactions are often a legitimate part of many businesses, the tax office claims many are doing the wrong thing on purpose in a bid to pay less tax.
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Originally published as Aussies dob in dodgy tax cheaters