What is tax evasion?
What is tax evasion?
Tax evasion generally occurs when people don't report all of their income, or they overstate their deductions. People do this to reduce the amount of tax they need to pay.
Tax evasion is an activity commonly associated with businesses that use cash transactions, which gives them the opportunity not to declare it and pay tax on it.
People who deliberately avoid paying their fair share of tax cheat the community and disadvantage Australians who do the right thing.
Examples of tax evasion
- Failing to:
- report all income
- report cash wages
- forward tax withheld from employee's wages to the ATO
- withhold tax from a worker's wages - for example, paying cash in hand
- pay employee super entitlements
- lodge tax returns, in an attempt to avoid payment
- lodge a tax return in order to avoid child support or other obligations
- deductions for expenses not incurred or legally deductible
- input credits for goods or services that GST has not been paid on.
Why is tax evasion a problem?
Australians value their tax and superannuation systems as community assets.
Tax evasion is a serious threat to the integrity of your tax system and to the revenue used to provide services to the community.
It also means some people have an unfair advantage over those doing the right thing. By telling us about suspected tax evasion, you are making it fairer for everyone.
How to report suspected tax evasion
If you think a person or a business is not playing fair, you can confidentially report suspected tax evasion:
- phone us on 1800 060 062 (free call), 8.00am till 6.00pm weekdays (except public holidays)
- fill in an online form - start online tax evasion reporting form
- fax us on 1800 804 544 (free call) - mark all information 'in confidence'
- write to us - mark all letters 'in confidence' and post to:
Australian Taxation Office
Locked Bag 6050
DANDENONG VIC 3175
Information we need from you
All tax evasion information we receive from the community helps to protect Australia's tax and superannuation systems.
Any information that relates to a person or a business could be helpful, such as:
- their full name, home address, tax file number (TFN), work address, employer (if employed), phone numbers, date of birth, bank account details, spouse's name, tax agent
- name of business, Australian business number (ABN), business bank account details, number of employees, director's names and addresses
- the details of the tax evasion taking place - for example:
- if they are receiving cash in hand, any assets that indicate they have a higher income than they are declaring
- when they pay cash wages, and to whom
- when they accept or demand cash
- types of transactions that are not recorded
- if they offer discounts for cash payments with no receipt or tax invoice
- approximate length of time the tax evasion has been occurring, and any documentary evidence confirming the tax evasion.
The more information you report, the better we can assess whether a person or business is doing the right thing.
Last Modified: Thursday, 20 December 2012