Taxation Law: Taxation Offences for Individuals & Organisations

Taxation law is an extremely complex area of law and one which contains a legion of offences that an individual or organisation can be exposed to.

If you have ignored the various overtures from the Australian Taxation Department (ATO) to lodge your tax return or your Business Activity Statement (BAS) and they commence prosecution, it is imperative that you obtain legal advice in order to protect your interests.

Tax Law It is not intended in this short paper to compass the vast composite of taxation offences, suffice to explain those offences which are the more common that affect individuals and business entities.

The two most common offences are:
1. Failure to lodge one’s tax return and
2. Failure to lodge a Business Activity Statement (BAS) as and when required.

These two offences, if allowed to accumulate over a period of time can result in large fines and if such returns are not lodged after order of a court, become criminal offences and can result in serious penalties including prison.

The Taxation Administration Act 1953 deals with the administration of various Commonwealth Acts to do with Taxation.

Section 8C deals with Failure to comply with certain requirements and states – 8C Failure to comply with requirements under taxation law:

(1) A person who refuses or fails, when and as required under or pursuant to a taxation law to do so:
(a) to furnish an approved form or any information to the Commissioner or another person; or
(b) to give information to the Commissioner in the manner in which it is required under a taxation law to be given; or
(c) to lodge an instrument with the Commissioner or another person for assessment; or
(d) to notify the Commissioner or another person of a matter or thing; or
(e) to produce a book, paper, record or other document to the Commissioner or another person; or
(f) to attend before the Commissioner or another person; or
(g) to apply for registration or cancellation of registration under the A New Tax System (Goods and Services Tax) Act 1999 ; or
(h) to comply with a requirement under subsection 45A(2) of the Product Grants and Benefits Administration Act 2000 ; or
(i) to comply with subsection 82 10F(4) of the Income Tax (Transitional Provisions) Act 1997 ;
is guilty of an offence.

Penalty (Sect 8E): First offence – 20 penalty units – $2,200.00. If a person has a previous conviction then such person is then subject to 40 penalty units – $4,400.00.

It should be noted however, that pursuant to Sect 8F, where a person has been convicted of two or more relevant offences, the Commissioner may treat the offence, otherwise than as a prescribed taxation offence which carries a penalty of 50 penalty units ($5,500.00) and/or imprisonment for 12 months.

When the matter goes to court, if your return is still outstanding, the Prosecution can ask the court for orders under Sect 8G of the Act, ordering that the returns be lodged by a required date.

FAILURE TO LODGE RETURNS by that date can result in the following penalties:

50 penalty units ($5,500.00) and/or imprisonment for 12 months.

Should you find yourself in the unfortunate position of being confronted with a Taxation Prosecution, come and see us at Proctor & Associates and we will gladly assist you through such turbulent time.

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