How much information about fraud prevention and tax crime should we disclose to the community?
Organisations involved in fighting crime wrestle with this question daily.
As the nature of criminal activities change with developments in technology and globalisation, the Government's response needs to evolve in order to stay one step ahead of the would-be perpetrators.
The ATO is constantly assessing the need to inform the public against the potential risks that this may represent. Sometimes it comes down to the specific issue at hand - we might, for example, alert the community about a tax file number scam or an illegal early access to superannuation scheme.
We are prudent about what we say and when. For example, common sense dictates that we do not disclose all the workings of our sophisticated risk engines. And we generally do not give minute details about the specifics of fraud activities.
However, the ATO's general position is to be as forthcoming and transparent with the public as possible.
Through our annual compliance program, we tell the community what concerns us and where we will be focusing our efforts. We follow this up with taxpayer alerts and we publish rulings, benchmarks and media releases to communicate specific issues and risks.
We strongly believe that prevention is better than cure. By communicating where we are focusing our efforts, or where there are risks, we believe it gives taxpayers a chance to correct their behaviour before they get on the wrong side of the law.
At the end of the day, there will always be someone foolish enough to interpret our communications as instructions on how to commit crime. Our greater responsibility is to protect the vast majority of taxpayers who do the right thing, by providing them with timely and relevant information.
One example which demonstrates the positive effect of providing information to the public about our initiatives to detect potential tax evasion, is the recently closed Offshore Voluntary Disclosure Initiative (OVDI).
The OVDI offered substantial benefits for taxpayers who chose to voluntarily disclose income they had in offshore accounts, prior to the ATO asking them to explain why they had not declared the income.
Information about data-matching initiatives, access to international funds transfer data, and the use of Tax Information Exchange Agreements with other countries was widely disseminated through the media.
This resulted in a significant spike in call volumes to the voluntary disclosure line with more than five times the number of calls received for the same period the previous year.