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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’.

    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.

    To report any known or suspected illegal behaviour you can either:

    • complete the tip-off form (the form is also available in the contact us section of the ATO app)
    • phone us on the ATO Tip-off hotline on 1800 060 062.

    What you can 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.

    Examples of 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 two sets of books
    • deleting transactions on the point of sale system
    • avoiding paying child support or other obligations
    • not declaring all of 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 that are paying their employees late or less than they should
    • business owners that aren't paying superannuation or other employee entitlements
    • 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 complain 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 voluntary disclosure so your client avoids possible penalties and interest charges)
    • 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.

    See also:

    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.

    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.

    Our response – the results

    When we receive information through a tip-off, we cross check the information and assess whether further action is required. Factors such as the amount of detail provided will help us assess your tip-off and enables us to take action where 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 2019–20 financial year we received approximately 56,000 tip-offs. So far in the 2020–21 financial year we have received 45,000 tip-offs. Since the introduction of the JobKeeper Payment in response to COVID-19, we have received around 14,200 JobKeeper tip-offs.

    The top five most common behaviours reported in the tip-offs this financial year are taxpayers not declaring all income (55% of tip-offs), taxpayers demanding or paying for work cash in hand to avoid obligations (26% of tip-offs), all sales not being reported (22% of tip-offs), misconduct related to the JobKeeper Payment (21% of tip-offs), and taxpayers having a lifestyle that does not match their income (20% of tip-offs).

    The top five categories of JobKeeper tip-offs received relate to allegations that employers are not satisfying the wage condition, allegations that businesses have not met the turnover requirement, fair work issues, employee eligibility and fictitious employees.

    The top five industries reported so far for the 2021 financial year are Building and Construction, Cafés and Restaurants, Hairdressing and Beauty Services, Takeaway Food Services, and Management Advice and Related Consulting Services.

    What we have done with this information

    Of the 45,000 tip-offs received so far in the 2021 financial year, 96% of tip-offs received and analysed were deemed as being suitable for further investigation or retention as useful intelligence. Further investigation into tip-offs is carried out by specialised teams and taskforces within the ATO, such as the Black Economy Standing Taskforce, Illicit Tobacco, Financial Crimes and Phoenix Taskforces.

    The ATO has also developed specialised teams to address allegations relating to Jobkeeper and other government stimulus measures to ensure we are actioning tip-offs faster and investigations are progressed in a timely manner.

    We’ve developed strategies for sharing information directly with external agencies where permitted by law such as the Fair Work Ombudsman, the Tax Practitioner’s Board, Australian Border Force and Australian Federal Police whilst maintaining taxpayer and informant privacy.

    Recent 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 recent tip-off made to the tip-off line has 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 of 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.

    Over $70,000 of GST refunds had been paid to the taxpayer and Investigations and discussions are ongoing.

    End of example

    Example  – Employer asked their employees to sign backdated contracts and JobKeeper forms

    An employer asked their employees to sign backdated contracts and JobKeeper nomination forms in order to claim payments. This sparked an investigation due to the significant increase of employees after 1 March 2020.

    Investigations found that the employer claimed JobKeeper payments for ineligible employees which included those who started employment after 1 March 2020. The employer also breached wage condition requirements, meaning the employer was not entitled to JobKeeper payments for a number of employees.

    The employer was required to repay over $200k of JobKeeper overpayments and an administrative penalty was imposed.

    End of example

    Example 5 – Employer claims JobKeeper payments for non-residents and an employee who had ceased employment

    An employer informed their employees that they were nominated as eligible for JobKeeper, however did not pass on the full JobKeeper payment amounts on to employees.

    Investigations confirmed that the employer had breached wage condition requirements, received JobKeeper payments for employees that were non-residents (making them ineligible) and continued to claim payments for an employee after they ceased employment.

    As the employer was not entitled to JobKeeper payments for a number of employees, the employer was required to repay the JobKeeper overpayment and administrative penalties were imposed.

    End of example

    See also:

    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 also:

    Authorised by the Australian Government, Canberra.

      Last modified: 30 Aug 2021QC 16789