ATO targets Northern NSW not-for-profit tax dodgers
THE ATO last week announced it was cracking down on taxpayers from Northern NSW and southern QLD who may be incorrectly claiming to be a not-for-profit organisation in order to avoid paying tax.
Assistant Commissioner Scott Parkinson said that the ATO is currently reviewing instances where individuals and small business have set-up ‘private foundations’ through which they stream their contractor or business income.
“In these cases the foundations and people who control them do not comply with their tax obligations such as income tax, superannuation and GST,” Mr Parkinson said.
“We are currently engaging with a number of taxpayers who we believe are operating under similar structures to get a better understanding of the arrangements in place. The ATO will take compliance action where we identify taxpayers that have entered into this type of arrangement.”
Mr Parkinson said that it is illegal to operate business activities through a not-for-profit organisation for the sole purpose of avoiding income tax responsibilities.
“Significant financial and criminal penalties could apply to people that make false or misleading claims about their tax affairs, such as falsely claiming to be a not-for-profit organisation.”
“Not-for-profit organisations exist to help others, to promote cultural, religious, community and recreational activities, or to improve our society. They don’t exist to help people stay out of the tax system,” Mr Parkinson said.
Individuals and businesses who have concerns about the way they have structured their affairs, can contact the ATO to make a voluntary disclosure to provide advice and correct past mistakes.
If you have information about these arrangements or would like to make a voluntary disclosure, phone the ATO on 1800 177 006 (press 1 for the taxpayer alert option). You can also email us on firstname.lastname@example.org