There is a very small proportion of taxpayers who seriously abuse the tax and superannuation system. These range from individuals hiding money offshore, through to people who fail to disclose income from illegal activities. In these cases, significant penalties for evasion are imposed, and some of these cases have also been dealt with by criminal prosecutions.
Even though many of these cases involve serious misconduct, the ATO will try to resolve disputes as early as possible wherever appropriate. In 2011-12, there were 49 cases settled. Of these, 23 were resolved at an early stage either during the audit or on objection, and the remaining 26 litigation cases were settled before hearings commenced.
Last year 14 cases were decided by the AAT and the Federal Court. In 11 of these cases, the decision was favourable to the ATO.