Did you know that the Australian Taxation Office (ATO) can prosecute you for failure to lodge a tax return and, even worse, if you are convicted, you will have a criminal conviction.

The first warning sign is the ATO issuing a Notice to Lodge outstanding tax returns.  If you receive such a notice do not ignore it. DO NOT IGNORE THIS.  This is your chance to lodge your returns and avoid a criminal conviction.

If you ignore it, the ATO can take prosecution action at any time.  Although it can be years before action is taken, once prosecution action is commenced there is no second chance.

The first notification a taxpayer will have is receipt of what is known as a Court Attendance Notice (“CAN”) stating that the taxpayer has to attend court in six-eight weeks time.

Unless the ATO has made a mistake in issuing the CAN, ie you have already complied with the Notice to Lodge, there is no option but to plead guilty because this is a strict liability offence.

In addition to having a criminal conviction you will also be liable to pay a hefty fine, unless the Court is prepared to issue a section 19B order.

Section 19B order – no conviction recorded

A further consequence of being found guilty of failure to lodge a tax return is the recording of a conviction on your criminal record.

Depending on individual circumstances, it is possible to obtain from the court an order that “no conviction be recorded”.   This is called a section 19B order.  Although not easy to obtain, it is not impossible.

What to do when you have been served with a Court Attendance Notice (CAN)

Do not ignore a Court Attendance Notice.  This is the worst you can do.  It will not go away and the Court can impose massive fines if you do not attend.

You  should immediately engage a lawyer so they can represent you in Court and try to get the best outcome possible in terms of fines and, where applicable, a s19B Order.

In a perfect world you will have lodged all outstanding returns and paid your tax bill by the time of the court appearance.

If you want to try to obtain a s19B order you should also engage a solicitor to present your case for you and advise on what personal circumstances are relevant for requesting a section 19B order.

Message: Do not ignore a Notice to Lodge Outstanding Tax Returns.  If you do, and a Court Attendance Notice is issued, start getting your tax affairs in order and engage  a lawyer.

Waterhouse Lawyers can help you with a Court Attendance Notice.  We have an excellent track record in obtaining the minimum amount of fine payable, and, where appropriate, a s19B order