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  • Phoenix Taskforce swoops on pre-insolvency industry

    The ATO’s firm stance against phoenix activity continued yesterday with 120 officers and their ASIC counterparts conducting access visits without notice on 13 business and residential sites across Victoria and Queensland.

    Deputy Commissioner Michael Cranston said the visits were triggered by complaints from the tax profession and legitimate insolvency practitioners as well as intelligence gathered from the 20-member cross-agency Phoenix Taskforce.

    “These visits are part of an ongoing investigation into the activities of a firm of pre-insolvency advisors and their involvement in encouraging and facilitating illegal phoenix activity, evading GST and failing to pay tax on $22 million of unreported income,” Mr Cranston said.

    “By showing up unannounced we’re able to access records that we might otherwise never have seen. This information is then used to take further compliance action, and shared among our partner agencies to better inform our strategies targeting the 50 highest-risk phoenix operators.”

    Mr Cranston said the ATO and ASIC are concerned about the pre-insolvency industry and its role in facilitating and promoting illegal phoenix activity.

    “Unlike registered liquidators these self-proclaimed ‘specialists’ operate in an unregulated environment. Tax professionals, liquidators and their professional associations have said they are also concerned about how the behaviour of a minority undermines the whole insolvency industry,” Mr Cranston said.

    The ATO conducted almost 1000 audit and review cases involving phoenix behaviour in 2015-16, raising $250 million in liabilities.

    “People involved in illegal phoenix activity need to understand that our joint enforcement action is working, and that continuing to engage in this behaviour might just end up with the ATO on your doorstep,” Mr Cranston said.

    “The members of the Phoenix Taskforce will continue to share information and collaborate on enforcement activity in order to stamp out illegal phoenix activity.”

    If you know of companies that may be involved in phoenix activity, report it online at ato.gov.au/reportaconcern or call 1800 060 062. You can also make a complaint to ASIC, and find help sheets by visiting asic.gov.au/about-asic/contact-us/how-to-complain/

    For more information on phoenix activity and the work of the Phoenix Taskforce, visit ato.gov.au/phoenix

    Last modified: 12 Aug 2016QC 49861