The ATO on Wed 21.3.2012, issued Taxpayer Alert TA 2012/1 warning taxpayers of arrangements under which Australian resident taxpayers do not correctly include income and other taxable amounts from foreign sources in their assessable income for Australian tax purposes.
The arrangements involve Australian resident taxpayers deriving foreign sourced income that is either received in Australia or accumulated offshore. The taxpayer does not disclose their interest and/or involvement in deriving the foreign source income by accumulating and/or reinvesting the income offshore, or accessing funds though loan arrangements or from the offshore bank account.
Among other things, the ATO says any income accrued offshore may be attributable to taxpayers under Pt X of the ITAA 1936. Further, it says the arrangements may be considered a sham and Pt IVA may apply. For taxpayers who make full voluntary disclosures to the ATO, the Commissioner said penalties may be reduced by 80%.
[LTN 55, 21/3]