Potentially dodgy tax schemes are being promoted online and offered to taxpayers when they least expect it.
We're seeking help from tax professionals to educate their clients about the risks of tax schemes promoted online (including on social media) promising to significantly reduce or avoid paying tax. Getting involved can attract heavy penalties.
Our website lists many examples of tax schemes we're concerned about. We encourage tax professionals to share these with their clients. Recently, one unlawful tax scheme we've seen encourages people to avoid taxes by setting up a purported not-for-profit foundation and organising their finances to look like their income belongs to it.
Another recent scheme is offering would-be investors the opportunity to invest in a start-up company. The start-up allegedly qualifies as an early-stage innovation company, and the advice claims investors will benefit from the associated tax offset. We're concerned that the investor won't qualify for this.
Such schemes can entice honest people who don't fully understand what they're getting into. If a client seeks advice about one of these tax schemes, let them know that getting involved is risky.
Detecting and acting on unlawful tax schemes is a priority for our Tax Avoidance Taskforce. A recent result is the Federal Court handing down $13.6 million in penalties to research and development scheme promoters we took action against.
Advice to give clients
- Encourage them to be suspicious of offers that seem too good to be true.
- If they're bringing a suspicious tax scheme to you, tell them to reject it and report it to us.
- Let them know that they are ultimately responsible for their own taxes.
- If they've already entered an unlawful tax scheme, advise them to contact us immediately. Approaching us may make them eligible for a reduction in any penalties.
Report a scheme
If you see someone doing the wrong thing you should report it. For more information see Recognising, rejecting and reporting unlawful tax schemes.