An American entrepreneur, Walter Anderson made his millions after the breakup of AT&T. He was convicted of the largest tax evasion scam in U.S. history for evading more than $200 million in taxes. It is reported that in 1998, he paid $495 in taxes on $67,939 of income.
demanding or paying for work cash in hand to avoid obligations. not reporting or under-reporting income. underpayment of wages. bypassing visa restrictions and visa fraud.
The most common is known as 'tax evasion', which is criminalised by with section 61 of the Act. This section stipulates that a person must not by a deliberate act or omission, evade or attempt to evade tax. For a person to be charged, the prosecution must prove all elements described beyond a reasonable doubt.
That includes Adani Mining Pty Ltd, one AGL entity, Alcoa Australian Holdings, Ampol, Anglo American Australia, ExxonMobil Australia, two Glencore entities, a Peabody Australia holding company, Santos, two Shell energy entities, Whitehaven coal, Woodside Petroleum, and Yancoal Australia.
Telstra and retail giant Wesfarmers dropped out of the top 10 in the report released on Thursday, as BHP was revealed to be the single largest taxpayer. The company paid $7.3 billion in 2020-21, up from $4.6 billion the prior year. The company's BHP Iron Ore (Jimblebar) entity paid $2.4 billion.
Retirement exemption
There is a lifetime limit of $500,000 CGT exemption on the sale of an active business asset. For those who are under 55, the proceeds from the sale of the asset must be paid into a super fund or retirement savings account to be entitled to this exemption.
If the issue is simply that you cannot afford to pay, you will not be imprisoned. However, tax fraud, also known as tax evasion, is a serious crime with the maximum penalty including a term of imprisonment. This is fraud though, which involves the illegal abuse of the tax system, rather than a simple inability to pay.
This is not surprising, nor unreasonable. It stands to reason that Australians would want to know why they are losing around USD $5 billion dollars in tax revenue every year, money that could be spent on services like schools and hospitals.
Tax evasion vs tax avoidance
Whilst tax evasion is illegal, tax avoidance is not. Tax evasion is the illegal practice of not paying taxes by not paying the taxes owed; reporting taxes that are not allowed legally; and not reporting income. It can apply to employment taxes, sales taxes, and income taxes.
The number of tax fraud offenders has increased slightly during the last five years. In fiscal year 2014, most tax fraud offenders were male (74.8%). More than half were White (53.9%) followed by Black (25.7%), Hispanic (11.5%), and Other Races (8.9%).
Tax Evasion (The Most Common)
A person typically commits tax evasion when they: Do not submit a tax return when they know they should. Artificially reducing or omitting Income. Include false personal deductions on the tax return.
Lodging inaccurate or dishonest tax returns or business activity statements with the Australian Taxation Office is a criminal offence warranting serious penalties ranging from 1 to 10 years imprisonment and heavy fines. These are also considered a type of white collar crime.
This includes cash deposits of 10,000 Australian dollars or more that you placed into your bank accounts in Australia or other financial institutions in Australia. When conducting an audit, the Australian Taxation Office (ATO) can obtain access to any reports made to AUSTRAC about cash transactions of $10,000 or more.
Will I get prosecuted if I don't lodge a tax return? Even though it's not common, the ATO can and does prosecute for failing to lodge tax returns. The maximum penalty which can be applied on prosecution is now $9,000 or imprisonment for up to 12 months.
These millionaires are able to arrange their financial affairs to massively reduce their tax. They claimed deductions in earning income from interest and dividends such as management fees and investment advice. They also claim deductions for the cost of managing their tax affairs.
If you are in debt to the ATO, you may be issued with a garnishee notice on your bank accounts with a demand to pay the ATO within a specified amount of time. Failure to do so can result in your bank accounts being frozen and a suspension on your trading accounts.
Not reporting your full income – The ATO looks at your full income, which may include bank interest, dividends, trust distributions, and other sources. You need to account for all of your income on your tax return, not just your salary or wage. Fail to do so, and you could trigger an audit.
The ATO can, and will, check your bank accounts, cross reference payments against an ABN and confirm missing income from your tax return.
If you make $100,000 a year living in Australia, you will be taxed $24,967. That means that your net pay will be $75,033 per year, or $6,253 per month. Your average tax rate is 25.0% and your marginal tax rate is 34.5%.
So if you're on $100k or more, congratulations, you're in the top 20% of Aussie income earners. If not, don't worry, you're in the good company of 80% of Aussies.