ATO reveals nearly 400 taxpayers convicted in September quarter

Nearly 400 people were convicted in the September quarter for tax and superannuation offences, the Australian Taxation Office has revealed, warning that business owners must lodge their appropriate statements or risk harsh penalties often running into the thousands of dollars.

The cases range in severity, from a Hobart man who was fined $4,000 for a failure to lodge tax returns between 2003-2007, to a Victorian man who was sentenced to seven years’ jail in the Melbourne Supreme Court for lodging over 180 false business activity statements.

Second commissioner Bruce Quigley has warned businesses that 17 of the most serious offences resulted in sentences ranging from eight months to seven years, and that the Project Wickenby investigations are delivering solid results.

“We take tax evasion, fraud and intentional non-compliance very seriously and these cases are a reminder that the ATO is watching and working with other government agencies to enforce the law,” he warns.

“We will continue expanding our ability to detect, deter and deal with those who do the wrong thing.”

During the September quarter over 21 people were successfully prosecuted for fraud and tax evasion, which included GST, refund fraud and dealing in the cash economy. Seventeen of those people received sentences ranging from eight months to seven-and-a-half years.

One New South Wales man received two-and-a-half years in jail after pleading guilty to participating in a round-robin tax fraud and money laundering scheme, resulting in fraud of over $180,464.

Another New South Wales woman was found guilty of running a cash-sales counterfeit clothing business, and failed to lodge income tax returns for over $3 million if income. She was sentenced to jail for over six years.

The ATO has also attacked business owners for conducting fraud around grants, with one South Australian woman declared guilty for making multiple claims under the Diesel Fuel Rebate and Energy Grants Credit Schemes worth over $130,000 – she received a three and a half year sentence.

The largest category of charges related to non-lodgement of forms, and receiving fees for preparing an income tax return while not actually acting as a tax agent, among other general offenses. A total of 312 individuals and 65 companies were convicted of tax offenses in this regard.

The cases include a Hobart man fived $4,200 after he failed to lodge tax returns for four years, along with a plasterer in Perth who was fined $11,000 for failing to lodge tax returns and business activity statements between 2004-2009.

An unregistered tax agent in New South Wales was fined $20,000 on nine charges for demand or receiving a fee while not actually acting as a registered tax agent. A Victorian man was fined $10,000 for 23 offences for failing to lodge activity statements between 2004-10.

One of the more serious cases involved a Victorian man who was found guilty of lodging over 180 false business activity statements, resulting in the ATO paying over $9.4 million in refunds. He was sentenced to over seven years’ jail with a non-parole period of five years. The ATO notes this is the second largest custodial sentence for a case of this type.

Quigley warns businesses to stay on top of their tax returns and statements, and says the ATO is always willing to work with business if they are having trouble managing payments.

“These results show that trying to cheat the tax system is not worth the risk… The majority of Australians do the right thing in paying their taxes and we will continue our full support of those taxpayers.”

“I encourage people who are unclear of their tax and superannuation obligations or who are struggling to meet their obligations to contact us.”

The ATO warns that more serious cases are referred to the Director of Public Prosecutions, including cases where imprisonment is likely, cases will attract significant attention and when the defendant has appealed against an original sentence.