Between 1 July 2018 and 31 May 2019, the Tax Office received nearly 60,000 reports of suspected tax evasion, the black economy or illegal phoenix activity, a 42 per cent increase on the volume of referrals in the same time period in the previous financial year.
More than half of all referrals received during the period were for suspected underreporting of income or about the cash economy, for example, businesses demanding cash from customers or paying their workers cash in hand.
Other tip-offs to the ATO include non-lodgement, inadequate or no superannuation paid, and overstating expenses.
“We’re seeing an upwards trend in the volume of referrals about people suspected of participating in the black economy, which suggests that honest businesses have had enough of competitors cheating the system and getting an unfair advantage,” said ATO assistant commissioner Peter Holt.
“Going on current numbers, we’re on track to receive over 70,000 community referrals before the end of this financial year. By way of comparison, we received over 51,000 referrals in 2017–18 and that was the highest ever number of referrals received.”
ATO tax integrity centre
The latest results comes as the ATO launches its new tax integrity centre on 1 July, providing a single point of contact for reporting suspected or known illegal phoenix, tax evasion and black economy activity.
“Our tip-off line is the taxation equivalent of Crime Stoppers for tax. Members of the community will be able to tip the ATO off online or by calling our hotline on 1800 060 062,” Mr Holt said.
“We value referrals from the community. Tip-offs are assessed and referred to experienced staff for review to determine if any action is required. 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.
“Even if you 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.”
While the tip-offs are private and can be anonymous, the ATO will request contact details in case further clarification is needed.
“Due to privacy laws, we won’t be able to inform you of the outcome of the information you provide. We also won’t be able to provide you with any updates on progress of the information you provided,” Mr Holt added.
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.