The ATO is dedicated to identifying and disrupting arrangements that exploit the tax system.
One investigation, which the Promoters Program took all the way to the Federal Court, uncovered a tax exploitation scheme promoted by a solicitor, financial planner and accountant.
Investigations by the ATO found Dr Bruce Rowntree, Mr Rinaldo Manietta and Mr Peter Donkin exploited their positions as advisers to promote a scheme in which they marketed Emission Reduction Purchase Agreements to clients on the wrongful basis of claiming a full deduction on credits that didn’t exist. Roughly 200 individuals and businesses used this scheme.
The trio charged their clients a 15% non-refundable deposit as a fee. In return, they promised an immediate reduction to their clients’ taxable income and a consequential tax saving that far exceeded their initial deposit.
The promoters have now been ordered to pay over $9.4 million. The solicitor, who was central to the creation, operation and marketing of the schemes, has been ordered to pay $7.75 million, while the financial planner has been penalised $1.455 million and the accountant (who has appealed the decision), ordered $210,000.
The penalties handed down reflects the seriousness of the conduct and the scale of the scheme. The behaviour of the promoters, who received significant financial benefits for their actions, showed little regard for their clients who trusted their advice.
Protecting individuals and businesses from getting inadvertently caught up in schemes like these is a priority for the ATO.
A case study outlining work of the Promoters and Tax Exploitation Program and the investigation of three professionals involved in a tax exploitation scheme