Understanding Tax Fraud and Evasion


Tax Related Crimes

Tax Fraud

Tax fraud and/or evasion are serious offences under taxation law, they involve intentionally deceiving or hiding information from the Australian Taxation Office (ATO) to avoid paying your proper amount of tax.

Image depicting handcuffs on tax evasion document

Tax fraud refers to deliberate actions taken to deceive ATO by providing false information or withholding important details. It could involve activities like underreporting income, inflating deductions, creating fake documents, or using offshore accounts to hide money.

Tax evasion, on the other hand, is the illegal act of intentionally avoiding paying taxes by taking actions that are contrary to the tax law. This could involve activities like failing to lodge tax returns, hiding income or assets, or transferring funds to offshore accounts to evade taxation. Tax evasion is also illegal and carries significant penalties.

The ATO has a wide range of measures in place to detect fraud and/or evasion. They use sophisticated data-matching techniques to identify discrepancies in tax returns, conduct audits and investigations, and work closely with other agencies both domestically.

Conquences of tax fraud/evasion

Tax fraud and evasion in Australia carry significant consequences. Tax fraud is illegal and can result in severe penalties, including fines and even imprisonment.  Here are some of the possible outcomes:

Criminal Charges and Imprisonment:

Serious cases of tax fraud or evasion can lead to criminal charges. If convicted, individuals may face imprisonment. The length of imprisonment varies based on the specific circumstances of the case.

Financial Penalties:

Individuals or businesses found guilty of tax fraud or evasion can face substantial financial penalties. The amount of the penalty depends on factors such as the severity of the offence, the amount of tax involved, and the taxpayer’s cooperation during the investigation.

Unpaid taxes can accrue interest charges and additional penalties. This increases the overall amount owed and adds to the financial burden.

Asset Seizure:

The ATO can, and does, to take legal action to seize assets to recover unpaid taxes. This may include properties, vehicles, or other valuable possessions.

Damage to Reputation:

Engaging in tax fraud or evasion can tarnish an individual’s or business’s reputation. This can have long-lasting negative effects on personal and professional relationships.

Additional ATO Scrutiny:

Individuals or businesses that have been involved in tax fraud or evasion may face heightened scrutiny from the ATO in the future. This can result in more frequent audits and investigations.

Legal Costs:

Defending allegations of tax fraud or evasion can be expensive. Legal fees, court costs, and related expenses can add to the financial burden.

Difficulties Obtaining Loans or Credit:

Convictions related to tax fraud or evasion can make it challenging to secure loans or credit in the future. Financial institutions may view individuals or businesses involved in such activities as high-risk borrowers.

It is essential that you understand that these are serious offences with severe consequences. It is always recommended you comply with tax laws. If you think you have committed fraud or evasion there are several actions that you can take to minimise the outcome.

Waterhouse Taxation Lawyers has the necessary skills and expertise to achieve the most favourable outcome.  Contact us now.



Law Council of Australia logo - Tax Lawyer Sydney Melbourne
law society of new south wales logo - Tax Lawyer Sydney Melbourne
the tax institute logo - Tax Lawyer Sydney Melbourne
Transfer Pricing Association Global logo - Tax Lawyer Sydney Melbourne