Date posted: 7/02/2018

Time to shine more light on tax crime fighting

Fighting tax crimes. Michael Croker, Tax Leader, looks at the storm fronts the ATO will tackle in 2018 and beyond.

In brief

  • ATO crime fighters will be newsworthy because of a looming assortment of tax-related storm fronts
  • Hiding income offshore and the Black Economy are among the mass of fronts challenging the ATO
  • Tackling the storms isn’t the ATO’s issue only. Accountants can help unmask tax crime

Handcuffed man, fighting tax crime

Occasionally, Australians gain insights into the work of a small but important group, the ATO crime fighters

Moreover, these frontline crime fighters will remain newsworthy in 2018 and beyond because of a looming combination of tax-related storm fronts.

Failure to disclose to Project DO IT

In the wake of the Panama Papers, critics of the ATO’s generous 2014 voluntary disclosure initiative (Project DO IT) claimed those hiding assets and income offshore would wait for the next amnesty, or quietly settle with the ATO if caught. The ATO will be conscious of this as its leak investigations conclude.

The same situation applies for offshore revelations the ATO obtains about Australians from the CRS. Data exchange with partner jurisdictions starts in 2018.

Global collaboration

Commissioner of Taxation Chris Jordan, as Vice Chair of the Forum on Tax Administration, leads the OECD’s Joint International Taskforce on Shared Intelligence and Collaboration and last year the OECD launched its 10 Global Principles for tackling tax crime. Prosecutions are the most tangible public way of demonstrating the success of these international initiatives.

Operation Elbrus and worker entitlements

Most commentators focus on Operation Elbrus in terms of its reputational damage to the ATO, due to the alleged involvement of some members of the Cranston family. But there is a bigger story developing. Expect more from the ATO as a defender of worker entitlements. The Minister for Revenue recently signalled this in her 24 January 2018 announcement on superannuation.

Inspector-General Review into ATO Fraud Control Management.

Some think Ali Noroozi is only looking at internal ATO safeguards in the wake of Operation Elbrus. But as stated on his IGoT website, “…as internal fraud may involve or be part of a broader scheme involving external parties, the review may have to consider other forms of fraud such as phoenix activities and related director identity issues”.

Other storm fronts include false deduction claims, the promoter penalty legislation, while the Minister for Revenue is considering recommendations about the Black Economy Taskforce. Meanwhile, AUSTRAC’s action against the Commonwealth Bank for alleged contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 is not only big news for the financial services sector.

There is new whistle-blower legislation, mandatory disclosure, and talk of a federal corruption and crime-fighting agency. There is also the Attorney-General’s response to the Australian Law Reform Commission’s report on Elder Abuse published by ATO.

But tackling tax crime isn’t just an ATO issue. In my opinion, we all benefit from shining a light on tax crime. What are your thoughts?

Want to know more about shining a light on tax crime fighting?

Visit Michael Croker's LinkedIn for a more comprehensive read on tax crime fighting along with links to related information.

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