The Australian Taxation Office (ATO) warns local communities, not to engage in tax evasion and beware of criminals who cheat people or steal their personal information.

The ATO is investigating approximately $850 million in potentially fraudulent transactions to around 40,000 individuals through Operation Protego.

With the average fraudulent amount claimed being $20,000, banks and financial institutions are partnering with the ATO to freeze bank accounts belonging to those suspected of tax fraud.

The ATO is reminding the community that:

• Backdating when a fake business is set up to seek a refund will flag you as high-risk and we will take action
  
• False declarations may impact eligibility for other government payments
  
• We have the data-matching ability to detect these patterns and stop the fraud
  
• Stealing from the ATO is not a victimless crime, you are stealing from people in need of government support and people using public services, such as schools and hospitals
  
• The ATO shares information with a range of government partners when responding to fraud, including law-enforcement agencies
  
• If you engage in tax fraud, you will be caught

Intelligence information is being sent from banks to the ATO, which has in turn been identifying suspicious tax refunds.

Many frauds see offenders attempt to gain a false GST refund by creating fake businesses and Australian Business Numbers (ABN) then submitting fake Business Activity Statements (BAS).

The ATO is warning people not to engage in this behaviour, and for participants to come forward and avoid further consequence and potential criminal action.

Law enforcement agencies are also working closely with the ATO to bring criminal action against those who deliberately and willingly partake in fraud schemes.

The ATO’s deputy commissioner and chief of the Serious Financial Crime Taskforce, Will Day, says many people are sharing techniques for fraud on various social media platforms.

“We are working with social media platforms to help remove content promoting this fraud, but if you see something that sounds too good to be true, it probably is,” Mr Day says.

“The people who have participated in this fraud are not anonymous – we know who they are and we will be taking action.”

“We are urging anyone involved to face the music and come forward now, rather than face even tougher consequences later including penalties and criminal charges.”

Mr Day acknowledges that legitimate taxpayers may be delayed in receiving their refunds due to the extra steps introduced to the process to deter and prevent fraudulent refunds from being paid out.

He also understands that some people may have unknowingly been caught up in fraudulent tax transactions.

“People who have participated in this fraud may have unwittingly followed advice they have read online, claiming to help access a loan from the ATO, or receive other financial government support such as a disaster payment,” says Mr Day.

“However, for others, there was nothing accidental or unintentional about setting up a fake business in their own name and seeking an unearned refund.”

“Circumstances where there were deliberate attempts to defraud the ATO or a refusal to organise repayments will lead to tougher actions, including criminal action.”