On 1 August 2018, the ATO used its access powers (without notice) at 11 sites in Melbourne and Shepparton, deploying more than 250 ATO officers, supported, in some locations, by Victoria Police officers.

This was part of a broad investigation into alleged phoenix activity and avoidance of tax. “We are examining a group of tax agents suspected of facilitating phoenix activity and promoting avoidance of tax involving GST, income tax and the failure to remit pay-as-you-go withholding tax payments.

The compliance action was triggered by complaints from concerned tax professionals and clients, as well as the ATO’s own intelligence.

It seems that ‘tax agents’ have been involved in bad conduct, whilst others have alerted the ATO to their concerns.

This comes at a touchy time for tax agents, after the Commissioner reported that a random audit of individuals’ returns showed a higher proportion of agent prepared returns, required correction, than taxpayer prepared returns. Up until then, the traditional wisdom was that tax agents were more clearly the gatekeepers of the tax system’s integrity.

Whilst praising the significant majority who do practise to high standards, the ATO says there are a number of agents who don’t participate appropriately in Australia’s tax and super system. The ATO is taking broader action against high risk agents, also known as ‘Agents of Concern’, to ensure there are significant consequences for the agents as well as referring the agents to the Tax Practitioners Board.

The ATO invited any member of the community, who has any knowledge or concerns about someone doing the wrong thing, to report it online at ato.gov.au/report a concern or by calling 1800 060 062.

FJM 19.8.18

[ATO website: Access Without Notice; LTN 147, 2/8/18; Tax Month – August 2018]

 

Comprehension questions (answers available)

  1. Did the ATO use its ‘access’ powers to search 11 sites in Melbourne and Shepparton, using over 250 officers, supported by Police (at some locations)?
  2. Was this part of investigation into ‘phoenix’ activity?
  3. Is it alleged that tax agents are involved in this?
  4. Did some tax agents take commendable action?
  5. Will complicit agents only face the Tax Practitioner’s Board?

[Answers:1.yes;2.yes;3.yes;4yes(someAgentsReportedTheirConcerns);

5.no(theATOwantsToEnsureOtherSignificantConsequencesForThemPersonally)]

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