ATO: Tax fraud tip-offs increase during COVID-19 lockdown

Tip-offs to the ATO’s top-secret tax evasion line about people demanding cash payments and under-reporting income have surged amid the COVID-19 lockdown. SEE THE TOP 5 REASONS

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Tip-offs to the ATO’s top-secret tax evasion line about businesses suspected of falsifying income declarations and paying for work cash in hand have surged amid the lockdown.

Exclusive data obtained from the Australian Taxation Office shows that almost 23,150 whistleblowers have turned people in for allegedly evading tax since January 2020.

While the world stayed at home amid the COVID-19 pandemic, certain types of tip-offs to the Tax Integrity Unit about black economy activity increased.

Black economy activity includes everything from demanding or paying for work cash in hand, not reporting or under-reporting income, illegal phoenixing, sham contracting, underpayment of wages and illegal drugs and tobacco.

It’s estimated this form of tax evasion costs the community as much as $50 billion each year, or around three per cent of GDP.

Tip-offs to the ATO’s top-secret tax evasion line have surged.

In the six months to date, claims of underreported income doubled on the same period last year to more than 13,600 while complaints about businesses demanding cash have also surged to 6,700.

Tip-offs relating to businesses not reporting all of their sales or people living lifestyles that don’t match their income also topped the list.

The most common calls came from “honest businesses and workers” who are “sick and tired of this kind of behaviour,” according to the ATO.

“Running a small business can be tough, especially during COVID-19, and when dishonest competitors are cheating the tax system by operating off the books, it’s really unfair and makes it even harder for honest businesses to succeed,” an ATO spokesman said.

While the Australian Taxation Office was not able to disclose how many tip-offs have led to prosecutions, they said the overall quality of tip-offs had increased in the past six months.

The taxman has received thousands of calls about suspected tax evasion this year.

They also said they were “committed to tackling phoenix, tax evasion and black economy behaviour and protecting honest businesses and the community and referrals through our tip off line are a key part of our approach.”

Anyone with information relating to suspected tax evasion should call 1800 060 062.

ATO zeroes in on COVID-19 fraud

The new data comes after the ATO issued a stern warning to Australians committing COVID-19 tax fraud.

As the new financial year begins, the tax man has clamped down on Australians taking advantage of the government’s JobKeeper, early super and cashflow bonus schemes.

The ATO has warned it has complex data sets including tax returns, Single Touch Payroll and third-party infroamtion to help red flag Australians wrongfully claiming money under the government’s stimulus measures.

Penalties for fraud can include financial penalties, prosecution, and imprisonment for the most serious cases.