Tax Commissioner Michael Carmody has issued a warning to individuals entering into offshore schemes directed at creating fictitious deductions or concealing income from tax that they may be not only breaching tax law but engaging in criminal activity.
He says in the past two days the Tax Office has unearthed information that indicates in some cases deductions are being claimed for payments for expenses and services that are fictitious. The schemes rely on the use of offshore structures put in place by the scheme's promoters.
In other cases, he adds, assessable income derived offshore is not brought to account in Australia, instead secretly returned to Australia disguised as a loan, an inheritance, a gift or through credit and debit cards.
"During our initial enquiries it became clear that not only were there possible serious breaches of tax law in this behaviour, but potential criminal activity. In some cases the information indicates that false documents and transactions are used in setting up the arrangements in the first place," he says.
"Cases involving potential criminal activity were referred to the Australian Crime Commission for investigation."
As part of their investigation, over the past few days the ACC, assisted by Federal Police and tax officers, has executed warrants at 48 sites around Australia.
Additionally, the Tax Office has exercised its powers of access to conduct unannounced visits at 37 sites.
"These were cases where there is information and material to justify audits of possible breaches of the tax law, that is, undisclosed income or improperly claimed deductions," Carmody says.
"Our decisions to use unannounced visits under our access powers were made taking into consideration the characteristics of these schemes such as document integrity, secrecy and concealment.
"Our enquiries are continuing. We will continue to refer matters where there is potential criminal activity to the ACC."