ATO deputy commissioner Tim Dyce said that with illegal tax schemes becoming increasingly sophisticated, getting the right advice is now more important than ever.
“We see many illegal tax schemes, which are often cleverly ‘dressed up’ as seemingly legitimate arrangements. These could have impact on your financial security, family and lifestyle,” he said.
Mr Dyce, who leads the ATO’s Aggressive Tax Planning (ATP) area, said it is important that investors seek additional advice before signing up to any tax scheme, no matter how professionally it is presented.
“Today, tax schemes are often slick. They’re dressed-up with glossy brochures and people in suits selling them. They’ve got a veneer of respectability," he said.
“We want people to be cautious. Look at the outcome and not the 'window dressing'. If that outcome doesn’t seem appropriate or sensible, ask somebody else.”
By way of example, Mr Dyce highlighted one such scheme which recently cost 151 individuals “an awful amount of money”.
“We recently came across one being sold out of a stall in a shopping centre that said it could help you pay off your mortgage in about five years," he said.
“But to sign up, you had to sign over your house to the scheme promoters, and refinance it with them to the full value of the house. You had to sign over your tax refunds and sign a waiver saying you wouldn’t tell anyone else about the arrangement and that included getting legal advice, supposedly because the scheme was so good that others would copy it.
“People were told that the ATO had signed off on the scheme, but weren’t given any evidence of that claim, nor did anyone actually check with the ATO to see if this was true, which it wasn’t,” Mr Dyce said.