ATO alert on fraudulence and non-compliance: COVID-19 measures
The ATO will be using its wide array of data sources (eg STP, income tax returns, information from super funds, etc) to assess and identify inappropriate behaviour. The ATO has also established a confidential tip-off line for the public to raise concerns of any wrongdoing.
“We’ve received intelligence about a number of dodgy schemes, including the withdrawal of money from superannuation and re-contributing it to get a tax deduction. Not only is this not in the spirit of the measure (which is designed to assist those experiencing hardship), severe penalties can be applied to tax avoidance schemes or those found to be breaking the law. If someone recommends something like this that seems too good to be true, well, it probably is”, ATO Deputy Commissioner Will Day said.
Mr Day said the ATO will be conducting checks, “so if you've received a benefit as part of the COVID-19 stimulus measures and we discover you are ineligible, you can expect to hear from us. If you think this may apply to you, you should contact us or speak to your tax professional”. Penalties for fraud can include financial penalties, prosecution, and imprisonment for the most serious cases.
Mr Day also cautioned the community to protect their identities and be vigilant of scammers.
The following is a summary of the ATO’s compliance efforts for each stimulus measure:
• JobKeeper: ensuring eligibility criteria is met (business income, eligible employees, etc) and no manipulation of turnover to satisfy decline in turnover test;
• early release of superannuation: identifying dishonest behaviour such as applying when there is no change in salary or employment information, artificially arranging affairs or making false statements to meet the eligibility criteria and withdrawing and re-contributing super for a tax advantage; and
• boosting cashflow for employers: identifying schemes designed to create entitlement such as artificially restructuring businesses, artificially changing the character of payments to salary or wages, inflating reported withholding amounts, resurrecting dormant entities or phoenixing and making false statements.
If you would like to know more please contact one of our accountants on 07 4639 1099 or come in and see us at 4 Bowen Street Toowoomba.