Tax evasion and ATO fraud involve deliberate actions to avoid paying tax lawfully owed to the Australian Taxation Office (ATO). These offences range from failing to declare income to complex fraudulent schemes involving false documents or offshore accounts. They are taken very seriously and can attract both civil penalties and criminal charges.

How Charges Are Laid by Authorities

Tax offences are typically investigated by:

• The ATO, through audits and data-matching technology.

• The Australian Federal Police (AFP), for serious fraud.

• The Commonwealth Director of Public Prosecutions (CDPP), which prosecutes offences under Commonwealth law.

Investigations can be triggered by:

• Suspicious tax returns

• Whistleblower complaints

• Inconsistencies in financial reporting

• International data-sharing arrangements

Once sufficient evidence is gathered, the matter may proceed to civil penalty action or criminal prosecution under the Criminal Code Act 1995 (Cth) or Taxation Administration Act 1953 (Cth).

Examples of Tax Fraud and Evasion

• Failing to declare cash income (“cash economy” fraud)

• Lodging false BAS (Business Activity Statements)

• Claiming fake or inflated deductions

• GST refund fraud

• Hiding income through fake invoices or “phoenix” companies

• Using offshore tax havens to conceal income

The Court Process

If criminally charged:

1. First appearance in the Magistrates’ Court

2. Matter may be escalated to the District or Supreme Court depending on seriousness

3. Prosecution must prove intent to defraud or deceive

4. Defendants can enter a plea and apply for bail

5. Trial (if not resolved early), followed by sentencing if found guilty

Civil tax matters are handled through AAT or Federal Court appeals.

Available Defences

• Lack of intent: Genuine mistake, not deliberate evasion

• Duress: Acted under pressure or coercion

• No financial advantage was gained

• Insufficient evidence of dishonesty

• Mental impairment or incapacity

Note: Rectifying the issue early (e.g. voluntary disclosure to the ATO) can reduce penalties or avoid prosecution.

Penalties

Penalties vary depending on the nature and seriousness of the offence:

Heavy penalties also apply to companies, directors, and professionals who assist in the conduct.

Relevant Laws

• Criminal Code Act 1995 (Cth) — Division 135 & 134 (Fraud)

• Taxation Administration Act 1953 (Cth)

• Income Tax Assessment Acts 1936 & 1997

• ASIC Act 2001, for corporate and director offences

• Anti-Money Laundering and Counter-Terrorism Financing Act 2006