iscover Tax Office targets gambler's $600k windfall
TaxA grocery worker with an extensive gambling habit has been penalised for failing to disclose an income that was more than 13 times her annual salary.
A former grocery worker has been ruled to have $587,394 in assessable income and ordered to pay a 50 per cent penalty on the shortfall after she claimed that her income for the 2017 year was only $42,018 from grocery store wages.
In Administrative Review Tribunal general member Catherine Willis’ 2 July 2026 decision, she heard that the worker, Gui Feng Cai, had deposited $480,000 into credit accounts at The Star Sydney, The Star Gold Coast, and Crown Melbourne, which she sourced from loans from friends and from winnings.
Crown records showed that on one occasion between 2014 and 2015, Cai spent tens of thousands of dollars gambling with two friends.
During the hearing, the tribunal member noted that Cai owed one of her friends $200,000 in gambling loans.
Cai told the tribunal that gambling for her was a big mistake because she had lost significant amounts of money, and it led to her estrangement from her ex-husband and her family.
“She said that after losing money she undertook further gambling in an attempt to win back amounts, and she borrowed money from various people to fund this further gambling,” and continues to owe money to friends and associates from her gambling losses, the member found.
“The Applicant said that she only gambled socially and in the company of her friends, and learnt to play Blackjack and Baccarat from[them].”
“The amounts of particular winnings or losses that she recalls varied from a couple of thousand dollars to $137,000,” the member said.
Following an audit between late October 2018 and September 2019, the Commissioner of Taxation issued Cai a notice of amended assessment and received a notice of assessment for a shortfall penalty, which was 75 per cent of the tax shortfall amount for the intentional disregard of taxation law.
In an objection decision on 8 September 2023 following an appeal by Cai, the Commissioner of Taxation determined that the penalty would be reduced to 50 per cent for “recklessness” instead of the previous figure.
”The Respondent’s view was that the ability of the Applicant to put several hundreds of thousands of dollars through these casinos was inconsistent with an individual who earned a modest amount of salary and wages. Therefore, the Respondent believed that the Applicant had not disclosed all of her income from all sources.”
The tribunal found that Cai had not proved on the balance of probabilities that the additional $545,367 was incorrect.
“The Applicant has not demonstrated with appropriate evidence what the taxable income should be.
“The Tribunal therefore finds that it was appropriate for the penalty to be determined at the rate of 50 per cent of the shortfall amount on the basis of recklessness.”
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Carlos Tse
Carlos Tse is a graduate journalist writing for Accountants Daily, HR Leader, Lawyers Weekly.