Tax crime and money laundering

Identify the suspected criminal conduct

Tax fraud can involve funds that are later moved or disguised. The ATO’s Operation Elbrus account describes investigations involving tax fraud and money laundering conspiracies.

That case shows the connection between different offences. It does not make every unpaid tax amount or incorrect return a money-laundering finding.

Source: Australian Taxation Office: About Operation Elbrus.

Separate an error from a supported suspicion

A reviewer needs facts about the conduct and money. An accounting difference may reflect an error, timing issue or dispute.

A suggested review records the explanation, supporting documents and any conflict. Staff should not invent an offence finding to fill a gap in the records.

Section 41 includes information relevant to tax evasion or attempted evasion among its suspicion grounds. The reporting test does not require proof of a conviction.

Source: Federal Register of Legislation: Section 41(1)(f)(i) and (ii).

An unexplained payment from a payroll business

A fictional payroll business requests a transfer to an unrelated company. The payment description does not match the agreement supplied to its service provider.

The reviewer seeks the purpose and recipient relationship through the approved process. It records the answer and any supporting evidence.

A corrected description may resolve the issue. If the facts support reasonable suspicion, the reporting decision follows the applicable test and deadline.

Source: Australian Taxation Office: About Operation Elbrus.

Keep the tax and AML decisions distinct

The article concerns a possible connection between offences. It does not determine the tax treatment of an arrangement.

A tax adviser, reporting entity and court have different roles. Use the relevant legal test for the decision that belongs to each role.

Source: Federal Register of Legislation: Section 41.