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  • Making a tip-off

    The term ‘black economy’ has now changed to ‘shadow economy’. This change reflects the Organisation for Economic Co-operation and Development’s (OECD) definition of unreported or dishonest economic activity. References to the Black Economy Standing Taskforce (BEST) will remain and the taskforce will continue to focus on activities identified under the OECD definition of ‘shadow economy’.

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    Importance of making a tip-off

    Most Australians believe in a level playing field and feel it’s unfair for others to gain a competitive advantage by intentionally doing the wrong thing. This puts pressure on Australians who are doing the right thing and has broader impacts on our community.

    We are committed to tackling illegal activity and behaviour of concern, especially when it comes to COVID-19 stimulus measures, phoenix, shadow economy and tax evasion, to protect honest businesses and the community.

    Making a tip-off is not just limited to tax issues. We want to hear when someone is gaining a competitive advantage over those who are doing the right thing. If you are concerned that you or someone you know is doing the wrong thing, you can tell us about it. See the fight against tax crime.

    How to report

    It only takes a few minutes to make a tip-off and you can remain anonymous. If you know or suspect phoenix, tax evasion or shadow economy activity report it by:

    • completing the tip-off form (the form is also available in the Help & support section in the ATO app)
    • phoning us on 1800 060 062
    • lodging an unpaid super enquiry about your employer (but not about another business)
    • writing to us – mark all letters 'in confidence' and post to

      Australian Taxation Office
      Tax Integrity Centre
      Locked Bag 6050
      DANDENONG  VIC  3175

    If you prefer to speak to us in a language other than English, phone the Translating and Interpreting Service (TIS) on 13 14 50 for help with your call.

    Tax professionals can provide information by calling 13 72 86 (Fast Key Code 3 4).

    Remember to make note of the reference number when you submit your tip-off form. You will need to quote it if you want to add any information later. You can make a tip-off in other languages.

    What can you report

    We want to hear about the following behaviours:

    • illegal activity and behaviour of concern relating to COVID-19 including JobKeeper or JobMaker Hiring Credit
    • demanding or paying for work cash in hand to avoid obligations
    • not reporting or under-reporting income
    • underpayment of wages
    • bypassing visa restrictions and visa fraud
    • identity fraud
    • Australian business number (ABN), goods and services tax (GST), and duty fraud
    • illegal drugs and tobacco
    • sham contracting – presenting an employment relationship as a contracting arrangement
    • illegal phoenixing – deliberately liquidating and re-forming a business to avoid obligations
    • involvement in tax avoidance schemes that go beyond the policy intent of the law and involve deliberate steps to avoid the tax and super systems
    • excise evasion
    • illegal purchase of Australian property by a non-resident
    • money laundering
    • unregulated gambling
    • counterfeit goods.

    Concerns you may have

    You might be offered:

    • a discount for cash, a cash deal or a 'cashy', without a receipt or a discount for cash or mates' rates
    • a job for cash wages, without payslips or superannuation entitlements
    • an arrangement that promises tax benefits, such as inflating or artificially creating deductions.

    You might see someone:

    • not ringing up a sale on their till or keeping the till drawer open
    • paying cash wages
    • having 2 sets of books
    • deleting transactions on the point of sale system
    • avoiding paying child support or other obligations
    • not declaring all their income
    • claiming work-related expenses they are not entitled to
    • advertising a tax planning scheme that is outside the spirit of the law
    • failing to lodge returns or keep records.

    Other examples may include:

    • business owners claiming personal expenses on a business account so they can claim deductions
    • business owners not lodging their activity statement or tax returns
    • business owners paying their employees late or less than they should
    • business owners not paying superannuation or other employee entitlements – see super for employers and working as a contractor
    • a small business tax client whose reported income falls outside our small business benchmarks
    • tax professionals encouraging you to claim incorrect or inflated deductions, or to hide or incorrectly change income that you should be reporting. If you are concerned about the conduct of a tax professional, you should also make a complaint to the Tax Practitioners BoardExternal Link.

    Tax professionals who are concerned about the conduct of another tax professional

    As a tax professional, you might:

    • see others representing themselves as tax professionals when they are not
    • be concerned about the inappropriate conduct of a client's previous tax professional – consider a voluntary disclosure so your client avoids possible penalties and interest charges
    • be concerned about the competency of another tax professional, such as whether an approved SMSF auditor is not meeting their obligation to conduct an independent and adequate audit
    • hear about clients who have been offered, or are involved in potential tax avoidance schemes
    • want to report your concerns to the Tax Practitioners BoardExternal Link or directly to us.

    How to make a good tip-off

    When making a tip-off, the more information you give us, the better we can work to protect honest businesses and the community. Even if you only know partial details or can only complete some sections of the tip-off form, this information is still very useful.

    If you are reporting an individual, useful information includes:

    • their name
    • address
    • phone number
    • social media details (for example, user names and profile addresses).

    If you are reporting a business, useful information includes:

    • name of the business
    • ABN
    • business address
    • phone number
    • website
    • social media details (for example, page name and profile addresses).

    Other useful information includes:

    • information on a group or network if there is more than one person or entity involved
    • details of the behaviour you have identified, such as            
      • hiding income
      • creating false expenses or tax deductions
      • not lodging tax returns or activity statements
      • encouraging payment in cash with no receipt
      • their income not supporting their lifestyle
      • not paying correct super to employees
      • using someone else’s identity to claim refunds
      • creating false or fraudulent documents or records
      • deliberately liquidating and re-forming a business to avoid obligations
      • presenting an employment relationship as a contracting arrangement
      • undertaking unusual activities that do not seem right, such as crop growing or selling plain packet tobacco
      • giving financial or legal tax advice that does not seem right
       
    • your contact details, so that we can contact you for further information if we need to.

    Our response – the results

    When we receive information through a tip-off, we cross check the information and assess whether further action is required – see our data matching. Factors such as the amount of detail provided will help us assess your tip-off and enables us to act when appropriate.

    Due to privacy laws, we won’t be able to inform you of the outcome of the information you provide. We also won’t be able to provide you with progress updates. Rest assured we take all information seriously.

    What we have received

    For the 2021–22 financial year, we received just over 43,000 tip-offs. The most common behaviours reported are:

    • taxpayers not declaring all income (59% of tip-offs)
    • taxpayers demanding or paying for work cash in hand to avoid obligations (29% of tip-offs)
    • all sales not being reported (26% of tip-offs)
    • taxpayers having a lifestyle that does not match their income (24% of tip-offs).

    Around 25% of tip-offs also report ‘Other’ unclassified behaviours, which allows us to keep track of emerging schemes and patterns of behaviour.

    The top 5 industries reported so far for the 2021–22 financial year are:

    • Building and Construction
    • Hairdressing and Beauty Services
    • Cafés and Restaurants
    • Road Freight Transport
    • Management Advice and Related Consulting Services.

    What we have done with this information

    Of the more than 43,000 tip-offs received in the 2021–22 financial year, approximately 95% of tip-offs received and analysed were deemed as being suitable for further investigation or retained as useful intelligence.

    Further investigation into tip-offs is carried out by specialised teams and taskforces within the ATO, such as:

    • Black Economy Standing Taskforce
    • Illicit Tobacco Taskforce
    • Serious Financial Crime Taskforce
    • Phoenix Taskforce.

    We have strategies for sharing information directly with external agencies (where permitted by law) while maintaining taxpayer and informant privacy, such as:

    • Services Australia
    • Fair Work Ombudsman
    • Tax Practitioner’s Board
    • Australian Border Force
    • Australian Federal Police.

    Notable cases

    Below are examples of tip-offs we received from the community, where sufficient information allowed us to undertake an investigation.

    Example 1: illegal tobacco seizure

    A tip-off made to the ATO Tip-off Hotline resulted in a tobacco importation seizure.

    Details of the tip-off were referred to the Australian Border Force-led Illicit Tobacco Taskforce (ITTF) for further investigation. The ITTF identified a shipping container mis-declared as “fitness equipment”. Following an examination, the container was found to contain 744kg of loose-leaf tobacco, equating to revenue evasion of approximately $1,290,265 in duty and GST.

    The illicit tobacco was seized and destroyed due to it being a prohibited import and imported without the appropriate permit. Investigations remain ongoing.

    End of example

    Example 2: amended income tax returns results in a debt of over $170,000

    A taxpayer amended their income tax returns over several years to show additional income and tax paid, which resulted in income tax refunds being paid to them.

    The Tax Integrity Centre received intelligence about this, and through investigation it was found that the taxpayer’s employment records were not valid.

    Within a month, the ATO conducted an audit which resulted in shortfall penalties relating to recklessness for income tax and a debt of over $170,000.

    End of example

    Example 3: incorrectly claiming GST refunds

    A taxpayer has been claiming GST refunds for machinery that has not been purchased.

    The Tax Integrity Centre received a tip-off about this, and during examination they identified a pending refund that was due to be issued to the taxpayer and put this on hold.

    The case was escalated to audit and over $70,000 in GST refunds were denied as the taxpayer did not substantiate the claim.

    End of example

    Your privacy

    Your privacy is protected by the Privacy Act 1988 and the strict secrecy provisions of the Income Tax Assessment Act 1936, the Taxation Administration Act 1953 and other tax laws. See your privacy if you make a tip-off and the short form privacy policy.

    See tax whistleblowers for information on qualifying for protection.

    Authorised by the Australian Government, Canberra.

      Last modified: 22 Jul 2022QC 16789