The release of the ATO's annual compliance program is a timely reminder of the compliance issues attracting our attention and what is being done to address them.
'Businesses participating in the cash economy to evade tax, phoenix arrangements, incorrect superannuation guarantee contributions, promoters of illegal early-release super schemes and some high wealth individual groups are just some of the focus areas for this year,' ATO Second Commissioner, Bruce Quigley said.
The compliance program is part of the ATO's holistic approach to encouraging, supporting, protecting and championing the interest of honest taxpayers and advisers, and of continually improving processes and capabilities for doing that.
'The majority of us appreciate that taxes pay for public goods and services such as education, health, law and order, defence, and welfare which underpin the type of society we live in,' Mr Quigley said.
'Those who deliberately do the wrong thing face serious consequences for their actions, including penalties and possible criminal prosecution.'
The ATO has a range of measures in place to ensure we detect and deal with those who evade their obligations; this includes working across government agencies and the use of overseas networks.
Project Wickenby and organised crime are a focal point of this year's program, with the ATO looking to strengthen its multi-agency taskforces that target the tax implications of organised crime.
The ATO's focus in this area is across all markets and entities abusing the tax system or having significant amounts of unexplained wealth.
'We are seeing an increase in sophistication, use of new technologies, and organised methods to manipulate the system. We are responding to this by improving our capability to detect suspect behaviour and issuing tougher penalties for those who rort the system to the detriment of the Australian community,' Mr Quigley said.
'Last year we cross-referenced more than 520 million transactions received from third parties with information people included in their income tax returns.
'We all have a role to play in protecting the tax system for the benefit of the community. If you believe someone is doing the wrong thing or you would like to talk about your own situation, I encourage you to contact us.'
Focus areas for this year
Data-matching
The use of increasingly sophisticated data matching technologies to detect non-compliant behaviour.
Cash economy
Focus on those who fail to report some or all cash transactions to ensure a level playing field. Examine businesses operating outside our small business benchmarks.
Phoenix arrangements
Reduce phoenix arrangements through a coordinated program of reviews and audits of tax affairs.
Super
- Protect employees' rights by ensuring employers are paying the correct amount of super guarantee.
- Implement strategies to deal with concerns we have with trustees of self-managed super funds and act against the illegal access or release of super.
Wealthy Australians
Extend our focus on lodgment compliance within private groups, including wealthy Australians.
Large business
- Examine large business corporate governance processes for managing income and indirect tax risks.
- Engage our very largest taxpayers in cooperative compliance approaches.
- Review related party arrangements to ensure profits are not shifted out of Australia.
- Review multinational borrowing arrangements to ensure Australian companies are not given inappropriate levels of debt, interest or guarantee rates.
Project Wickenby and organised crime
- Continue to deal with the abusive use of tax secrecy havens including Project Wickenby.
- Strengthen our involvement in multi-agency taskforces that target the tax implications of organised crime.
Work-related expenses
Attention to deductions made by people employed as earthmovers, flight attendants, carpenters and joiners (including apprentices and trainees), and real estate employees.
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Last Modified: Tuesday, 20 March 2012