ATO fires warning ahead of tax time
The ATO has released a wide range of case studies of taxpayers cheating the tax system as it signals its hard-line stance ahead of tax time 2019.
The first case involves 56-year-old Peter Garven, who was sentenced in the Sydney District Court to three years and three months’ jail time for fraudulently obtaining and attempting to obtain more than $200,000 from the ATO.
As the sole director of Peter Garven Consulting and Garven Resources, between October 2002 and July 2004, Mr Garven lodged three income tax returns where he fraudulently obtained $102,504 in refunds and attempted to obtain a further $41,758.
Mr Garven claimed to have received salary and wages of more than $150,000 from the University of New South Wales, despite the university having no record of any payments to Mr Garven. In addition, between August 2002 and July 2004, Mr Garven fraudulently obtained $51,684 in GST refunds on behalf of his two entities, Peter Garven Consulting and Garven Resources.
In 2004, Mr Garven acknowledged that his claims were false and said he would lodge amendments. The ATO never received the amended returns, which triggered audit action. Following this, Mr Garven failed to appear in court for his trial in March 2009, with a warrant for his arrest issued shortly after. He went into hiding and was registered on the missing persons list. In 2017, he was arrested on a warrant by the NSW Police in the Watagan Mountains. Mr Garven has also been ordered to repay $154,188.96.
Fraudulent BAS leads to jail sentence
A wholesale distribution company director has also been sentenced to four years and six months’ jail time for fraudulently obtaining and attempting to obtain nearly $600,000. David Irvine lodged 39 BAS between January 2012 and March 2015. By reporting fake export sales, he reduced the company’s GST payment obligations and fraudulently obtained $480,680 in refunds he wasn’t entitled to.
Mr Irvine also failed to report any income on his personal tax returns for the 2009 to 2011 financial years, resulting in a tax shortfall of $116,056.
Sole trader gets home detention
Linda Taylor was sentenced in the South Australia District Court to two years and nine months to be served on home detention after being convicted of GST fraud made in BAS lodged between April 2013 and September 2015.
Ms Taylor, a sole trader of a home styling business trading as Signature Styling Design Innovation, lodged 32 monthly BAS with the ATO, fraudulently obtaining $138,076 in GST refunds. The audit found Ms Taylor claimed a total of $2,023,646 in capital and non-capital purchases in her BAS, with her overall reported sales during the same period inclusive of GST being $259,977. To support these claims, Ms Taylor supplied false documents to the ATO.
The court found these claims to be entirely fraudulent. Signature Styling was not entitled to GST refunds that had been claimed and received. The audit found Ms Taylor used the money obtained to fund private expenses like school and vet fees, meals at restaurants and hotels, as well as significant spending on hair and beauty services, clothing, shoes and accessories.
She has also been ordered to perform 150 hours of community service and pay reparations of $137,936.