ATO warning for millions over sinister new trend: 'Luring in honest people'
The Australian Taxation Office (ATO) is warning people to be wary of too-good-to-be-true schemes they might see online. It has noticed an uptick in dodgy tax schemesthat "lure in honest people" by promising amazing benefits.
Many of the schemes offer ways to reduce or avoid paying tax altogether and the ATOsaid that should serve as a big red flag. The tax office's Acting Deputy Commissioner Sarah Taylor said you need to have your wits about you while scrolling the internet.
"Sometimes tax schemes can be peddled as investment schemes. We don’t want to see honest people lured into unlawful tax schemes with false promises of high returns and tax savings – if an offer seems too good to be true, it probably is," she said.
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"Those who invest in unlawful tax schemes stand to lose their hard-earned cash, and risk paying tax with interest and heavy penalties.
"Promoters of these schemes are often opportunistic and target vulnerable people. Protect yourself and your money by getting advice from a registered tax practitioner before committing to anything."
'Not victimless crimes': Tax schemes on the ATO's radar
The ATO singled out one recent scheme that asked people to invest in a start-up company that claimed to qualify as an early-stage innovation company (ESIC).
Wannabe investors are told that by plunging their cash into an ESIC, they can claim the early-stage investor tax offset on shares purchased through the scheme.
However, the tax office is dubious about the ESIC claims for these companies and investors might not be able to access the promised tax benefits.
Another scheme the ATO has noticed is one tricking Aussies into thinking they can avoid paying tax if they set up a "non-profit foundation" and put their income into it.
This method won't actually allow you to dodge the taxman and you'll still have to cough up the dough.
"Promoting and participating in unlawful tax schemes are not victimless crimes," Taylor added.
"Those who choose to engage in these behaviours are attempting to obtain an unfair advantage over those who do the right thing.
"We take targeted action against unlawful tax schemes that promote tax avoidance behaviours and against those who promote these schemes. We are committed to helping protect the community against misinformation about schemes spread on various channels."
The ATO is encouraging anyone who comes across these types of schemes to report it via the tip-off form or by calling 1800 060 062.
