Whilst tax fraud is something that we all know is an extremely bad idea, some people still attempt to try their luck at outsmarting the Australian Tax Office. The regulatory processes and auditing procedures that are in place are strict and rigorous so there is little chance of getting away with whatever scheme you are trying to pull.
As with most fraud cases, the perpetrator may be seen to somewhat “get away with it” for a significant period but the hands of justice will always catch up with them and when they do it is not simply a fine or a slap on the wrist. Tax fraud is a serious crime and is punished as such.
Recently, the Tax Office released the story of a 34 year old Sydney woman who has been sentenced to seven years jail after being found guilty of obtaining financial benefit by deception, attempting to obtain financial benefit by deception and dealing with the proceeds of crime. It was found that the woman had falsified over 15 activity statements resulting in claims for over $500,000 of GST refunds.
This is indicative of the little tolerance that the ATO and other relevant authorities have for any attempts at fraud, whether it be identity or tax related.
The Tax Office is extremely diligent when it comes to regulating the lodgment and claims practices of taxpayers across the country. It has a range of comprehensive procedures and programs in place that allow them to identify and investigate unusual activity and claims.
The correct lodgment of tax returns and activity statements as well as the prompt and thorough payments of any tax obligations not only ensures that you are protected from any penalty payments or unwelcome audits but also allows our tax system to run as smoothly and fairly as possible. Those who insist on trying to do the wrong thing by the system will inevitably be brought to justice but are significantly disadvantaging the majority of taxpayers who are trying to do the right thing.
A few things that you can do to help ensure that you are operating within the requirements of the Tax Office include simple tasks such as:
- Ensure that your business is registered for the appropriate taxes.
- Advise the relevant organisations of any change of contact details in a timely manner. This will ensure that you don’t miss any important information and are easily contactable should the need arise.
- Keep accurate and adequate records – especially for unusual or infrequent transactions, such as Capital Gains Tax.
- Only claim what you know is a genuine tax deduction.
- Use only legitimate business structures.
- Be diligent and ensure that all required forms and returns are lodged on time.
- You can pay the minimum tax you are legally required to, but be sure to always pay some tax as businesses that continually report losses can often become a target for audits.
- Never “back date” documents.
- Employ the resources of a professional accountant and/or tax advisor. They will be able to provide you with general and ongoing advice specific to your situation and also assist you to:
o Undertake a risk assessment review to identify areas that could potentially trigger a problem, and a possible audit.
o Provide reliable taxation advice on any significant tax issue, particularly in relation to transactions that involve a significant amount of money.
- You should also contact a professional if you are having problems meeting your current obligations, they may be able to help you address the situation before it escalates.
Adopting the above tips into your regular business practices will not only help you to keep your accounts in order and may also assist in reducing your chance of being audited as the Tax Office may be able to see that you are operating compliantly and you will reduce the chance of raising any alarm bells on their radar.
All types of tax, GST in particular, can be somewhat confusing and daunting for many small business owners. For this reason it is important that you seek the services of a professional tax agent or accountant. This will ensure that you not only get the maximum returns that are due to you but also that you are meeting all of you tax obligations in a legally compliant manner.
If you have any questions or queries regarding anything tax, accounting or audit related call us on 1300 QUINNS or click here to submit an online enquiry and one of our team will contact you to discuss how The Quinn Group can help you.