While most people do the right thing, the small number of people who engage in refund fraud will be held to account.
Examples of refund fraud
Refund fraud is claiming a tax refund or other benefit by giving us false information. It is more than a careless or accidental mistake because it is undertaken in a deliberate and deceitful way.
Refund fraud can also involve identity crime. This is where personal identity information is stolen and used to lodge fake refund claims in someone else's name.
Refund fraud can include:
- making false work-related expense claims
- providing fake information and documents, such as invoices and receipts
- lodging fraudulent returns using false or stolen identities
- claiming GST refunds through fraudulent business registrations.
If you’ve made an honest mistake or are falling behind on your obligations, we’ll work with you to find a solution. But we’ll hold people who deliberately set out to cheat the system to account. This could include administrative penalties, or even criminal prosecution.
Example: criminal conviction for fake donation deductions case study
A public servant falsely claimed to have spent more than $100,000 on gifts and donations. She was convicted and fined $10,000.
Over the course of 5 years, she claimed to make regular donations to an entity. The refunds were never paid out, as she was unable to support her claims. But in one instance, she tried to mislead our auditors by providing a false letter.
When we got in touch with the 'author', she had never seen the letter before. The ABN and signature were also incorrect.
During sentencing, the Magistrate noted that the defendant had continued to make false claims despite being audited several times, which was an escalation of criminal behaviour.
End of exampleExample: fake invoices lead to prosecution case study
A man working in aged care claimed deductions for a different degree to the one he had undertaken. He received a criminal conviction, a $5,000 fine and was ordered to pay $3,000.
Over 3 years, he claimed almost $75,000 worth of work-related self-education expenses.
He gave his tax agent invoices that said he was studying a course. They even included a break-down of the subjects he was taking that semester.
But when we reached out to the university, it was clear the invoices had been changed. He was studying a different course, which did not relate to his employment. He wasn't entitled to claim the expenses.
End of exampleExample: teacher convicted after producing 36 false documents case study
A teacher made an elaborate attempt to mislead our auditors. She received a criminal conviction, a $3,500 fine and was ordered to pay $10,000.
When we audited her tax returns, they included unusually high work-related travel, clothing and self-education expenses. We gave her the opportunity to amend her tax returns to reduce potential penalties. But instead of withdrawing the false claims, she produced 36 false documents to back them up.
The auditors quickly identified inconsistencies in the documents, including spelling mistakes and invalid phone numbers and ABNs. Checks with the companies in question confirmed the documents were fake.
End of exampleOur approach to refund fraud
Refund fraud steals revenue that is used for the whole community and disadvantages Australians who do the right thing. We take it very seriously, and we have a range of controls and systems in place to detect potential refund fraud, including:
- analytical models that use behavioural and statistical algorithms to analyse information on tax returns, business activity statements and other tax forms
- strong data- and intelligence-sharing capabilities with our partners in Australia and overseas.
If you have information about suspected refund fraud, you can confidentially report it to us.
Learn more about how we keep the tax system fair for everyone by accessing our latest tax crime prosecution results and case studies.
Refund fraud occurs when people dishonestly claim refunds, rebates or offsets they aren't entitled to.