The Australian Taxation Office (ATO) is cracking down on Aussies who invent fake businesses to claim false refunds.
The ATO has warned the community not to engage in this kind of fraud and is encouraging those who have engaged in that kind of behaviour to come forward.
The ATO has worked closely with banks and the Reserve Bank of Australia (RBA) to identify a recent spike in suspicious refunds.
The ATO, through Operation Protego, is investigating around $850 million in potentially fraudulent payments made to around 40,000 individuals, with the average amount fraudulently claimed being $20,000.
“We are working with financial institutions who have frozen suspected fraudulent amounts in bank accounts,” the ATO said in a statement.
The ATO said it had also stopped many more attempted frauds.
The fraud involves offenders inventing fake businesses and Australian Business Number (ABN) applications, many in their own names, then submitting fictitious Business Activity Statements in an attempt to gain a false GST refund.
The ATO is reminding the community that:
Backdating when a fake business is set up to seek a refund will flag you as high-risk and we will take action
False declarations may impact eligibility for other government payments
We have the data-matching ability to detect these patterns and stop the fraud
Stealing from the ATO is not a victimless crime, you are stealing from people in need of government support and people using public services, such as schools and hospitals
The ATO shares information with a range of government partners when responding to fraud, including law-enforcement agencies
If you engage in tax fraud, you will be caught
The ATO said it was working closely with law-enforcement agencies to prioritise criminal action against those who had participated in fraudulent activity.
ATO deputy commissioner and chief of the serious financial crime taskforce Will Day said information on how to attempt the fraud was being shared online, including via social media platforms.
“We are working with social media platforms to help remove content promoting this fraud, but if you see something that sounds too good to be true, it probably is,” Day said.
“The people who have participated in this fraud are not anonymous. We know who they are, and we will be taking action."
Day said the ATO was urging anyone involved in tax fraud to “face the music” and come forward now rather than face tougher consequences later - including criminal charges.
“Unfortunately, as we take action to protect revenue, some legitimate taxpayers may find they have to take extra steps to receive their legitimate refunds as we have put extra controls in place as a result of this fraud,” Day said.
“But we must emphasise that the fraudsters are not real or legitimate small businesses.”
Day said the ATO was aware of some scams that may have unwittingly dragged some legitimate business owners in.
“People who have participated in this fraud may have unwittingly followed advice they have read online, claiming to help access a loan from the ATO, or receive other financial government support such as a disaster payment,” he said.
“However, for others there was nothing accidental or unintentional about setting up a fake business in their own name and seeking an unearned refund."
Day said anyone who had engaged in the fraud should call the ATO’s dedicated hotline on 1300 130 017.