Earlier this month, Brendan Harty was convicted in the Melbourne County Court in relation to approximately $950,000 of tax fraud. The fraud occurred between October 2013 and August 2016.
He lodged 161 false tax statements with the ATO, including 139 business activity statements and 22 income tax returns in the names of 31 separate entities or individuals.
Harty also claimed about $875,000 in tax refunds to which he was not entitled. During the same period, he also attempted to obtain refunds totalling approximately $46,000, and stole about $37,000 from various clients.
He was convicted of 10 charges of obtaining financial advantage by deception, one charge of attempting to obtain financial advantage by deception and one charge of obtaining financial advantage.
Accountants Daily understands there are a number of other cases involving tax agents currently before the courts.
Following Harty’s sentencing, the ATO has again fired warning shots at the tax agent community ahead of tax time this year, stressing it will maintain a “strong focus” on tax agents who operate outside the law.
“As this case demonstrates, the ATO is resolute in identifying and prosecuting tax agents who abuse their position of trust by either conspiring with or against their clients to defraud the tax system,” deputy commissioner Will Day told Accountants Daily.
Accountants Daily asked the Tax Office if there are mechanisms in its operating systems to prevent activity of this nature, given Harty was able to use the systems to his advantage for fraud of a significant scale over a period of three years.
“The ATO has a sophisticated program of data matching to detect attempts to defraud the tax system, such as this one. We analyse and risk-assess data received from external sources, as well as through our internal processes. This includes tip offs from concerned citizens,” the tax office said in response.
“The ATO has a dedicated tax crime unit which is focused on detecting and prosecuting those who seek to defraud the tax system. We work closely with our state and federal partners to share intelligence, and deal with those who defraud the taxation and superannuation systems.”