The ATO is getting tough on tax fraud, inviting honest Australians to use their Black Economy hotline to phone in tips-offs for suspected wrongdoing.
Aussies were quick to take them up on the offer, calling in with a staggering number of reports - close to 60,000 tips-offs have been made in 2019 alone. That’s almost double the number from the previous year.
So, what kinds of behaviours are being reported? And are you at risk?
The ATO’s tip-off line = Crime Stoppers for tax fraud
ATO Assistant Commissioner Peter Holt believes that the reason for the success of the tip-off line is that honest Australians have “had enough” of those who cheat the system in order to obtain an unfair advantage, because it goes against our notions of fairness.
The success of the tip-off line has seen the ATO dubbing it their “Crime Stopper” for tax, and the sheer volume of calls has led to the launch of a new and improved “Tax Integrity Centre”, which will provide a single point of contact for reporting tax evasion.
The Top 5 tax evasion “tip offs” to the ATO
What sort of issues are being reported to the ATO? Common complaints relate to suspected tax evasion, illegal phoenix activity and the black economy. More than half the tip-offs were about under reporting income or the illegal cash economy.
- Under-reported income 31%
- Cash economy 27%
- Non-lodgement 25%
- Inadequate or no super paid 8%
- Over-stating expenses 3%
Dodgy behaviours that can get you reported
With the number of tip-offs for 2019 predicted to reach 70,000, it’s important to make sure that your own tax affairs are above board. Tax law is complicated, and people can make honest mistakes - illegal ones - if they aren’t sure about the rules.
While some of these things can result from ignorance of the law (work expense claims) or disorganisation (not lodging returns or poor record keeping), many are deliberate acts of fraud that can result in heavy penalties if you are found to be guilty.
Examples of typical behaviours that are reported to the tip-off line:
- Cash deals without a receipt or cash discounts and “mates rates”
- Employers who pay staff in cash without payslips or super
- Not ringing up a sale on the till, or keeping the till drawer open
- Keeping two sets of accounting books
- Deleting transactions on the point of sale system
- Claiming work-related expenses you are not entitled to
- Attempting to avoid child support by falsely reporting income
- Failing to lodge returns or keep records
- Arrangements that promise tax benefits like fabricated deductions
Business owners are also being reported
Wage theft has been making headlines in Australia of late, thanks to the scandal around celebrity chef George Calombaris, and the revelations that his restaurants have been systematically underpaying their staff to the tune of around $7.8 million.
Business owners are also being reported to the ATO tip-off line. Some of the reasons include claiming personal expenses on a business account to claim deductions, underpaying or late paying employees and not paying super or other entitlements.
How to report suspected tax cheats
Think you know about something that isn’t quite right?
If you suspect or know of phoenix, tax evasion or black economy activity you can report it through the ATO website or by calling 1800 060 062. The ATO relies on the goodwill of the Australian public to report suspicious behaviour - because honesty is always the best policy.
