FORMAT]
[AUDIENCE]
[DATE]
UNCLASSIFIED
This document and its
attachments are SENSITIVE
once filled in.
FORMAT
AUDIENCE
DATE
CLASSIFICATION
FILE REF: [FILE NO.]
FRAUD OR EVASION SUBMISSION
Once completed, this document is to be reclassified as SENSITIVE and stored
appropriately. To re-classify: open the toolbar ‘ATO tools’ > Click on Security
Classification & Header/Footer > Change the drop down classification to SENSITIVE.
PURPOSE
This submission template is to be used to present sufficient information, facts and evidence on
which the Commissioner may form an opinion that there has been fraud or evasion and/or
satisfy the Commissioner that an unpaid net amount was avoided by fraud or evaded or that a
payment of an excess was brought about by fraud or evasion.
A fraud or evasion opinion allows the Commissioner to amend an income tax assessment
and/or seek to recover an excess amount, an unpaid net amount, net fuel amount or other
indirect tax more than four years after it became payable at any time.
FRAUD OR EVASION GUIDELINES
This template is supported by the Fraud and Evasion Guidelines. ATO officers should
familiarise themselves with the Guidelines before completing this template.
RELEVANT LEGISLATIVE PROVISIONS
Subsection 170(1) item 5 ITAA 1936
(2004-05 and following income years)
Paragraph 170(2)(a) ITAA 36
(2003-04 and prior income years)
Subsection 171A(2) ITAA 36
(2003-04 and prior income ‘nil’ years)
Paragraph 105-50(3)(b) Schedule 1 TAA 1953
<Delete non-relevant provisions as appropriate>
TAXPAYER DETAILS
Taxpayer:
TFN:
ABN:
Entity Type:
UNCLASSIFIED
PAGE 1 OF 7
UNCLASSIFIED
Date of Birth/Incorporation:
Address:
Tax Agent:
Siebel Case ID:
FRAUD OR EVASION SUBMISSION
1-
REFERRING ATO OFFICER
Case Officer:
ATO Office:
Contact Details:
TABLE OF CONTENTS
Issue/s..........................................................................................................................................2
Periods under review ...................................................................................................................3
Income Tax ...........................................................................................................................3
Indirect Taxes .......................................................................................................................3
Chronology of material facts ........................................................................................................3
Evasion ........................................................................................................................................4
Relevant Authorities..............................................................................................................4
Elements ...............................................................................................................................4
Discussion.............................................................................................................................4
Fraud............................................................................................................................................5
Relevant Authorities..............................................................................................................5
Elements ...............................................................................................................................5
Discussion.............................................................................................................................5
Recommendation .........................................................................................................................6
Income Tax: ..........................................................................................................................6
Indirect Taxes: ......................................................................................................................6
SNC and S&ME specific instructions ...........................................................................................7
Referral to Technical Panel:..................................................................................................7
ATO Procedures – Authority to Amend........................................................................................7
Authorisation levels ......................................................................................................................7
Income Tax ...........................................................................................................................7
Indirect taxes.........................................................................................................................7
Referral to Decision Maker...........................................................................................................7
Income Tax ...........................................................................................................................7
GST and indirect Taxes ........................................................................................................7
ISSUE/S
1
Is the Commissioner of the opinion that there has been fraud or evasion in order to amend
the taxpayer’s assessment at any time for the income years ended 30 June ??? to ????
2 Is the Commissioner satisfied that the payment of the net amount/s, net fuel amount/s
and/or other amount/s of indirect tax was avoided by fraud or evaded or that payment of an
excess was brought about by fraud or evasion?
<Insert/delete issues as appropriate>
UNCLASSIFIED
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UNCLASSIFIED
FRAUD OR EVASION SUBMISSION
PERIODS UNDER REVIEW
Income Tax
Relevant dates (Notices of Assessment):
Income year
Issue date
Due and
payable date
Expiration date of
amendment period
<Delete table as appropriate>
Indirect Taxes
Relevant dates (Business or Instalment Activity Statements):
Tax period
Lodgement
date
Due and
payable date
Expiration date of
amendment period
<Delete table as appropriate>
CHRONOLOGY OF MATERIAL FACTS
A chronology is a sequential list, in date order, of all the relevant facts. This includes
events, transactions, documents and statements. Each entry in the chronology must be
footnoted with a reference to the evidence from which the fact has been drawn. The
following table should be completed by extracting the relevant entries from the Facts and
Evidence Worksheet.
Date
<1/11/09>
Facts
<Facts should be cross referenced to the evidence with
footnotes as per footnote example.>
<Eg: Taxpayer lodged income 2003-04 ITR without declaring
capital proceeds on sale of property settled 25/05/04.> 1
1
Eg: “See taxpayer’s ITR lodged with ATO 1/11/04, Sale contract dated 01/04/04 and Settlement statement
dated 25/05/04”
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UNCLASSIFIED
FRAUD OR EVASION SUBMISSION
EVASION
Relevant Authorities 2
The common test used to describe evasion arises from the High Court in Denver Chemical
Manufacturing. 3 Dixon J stated:
‘I think it is unwise to attempt to define the word “evasion”. … it means more than avoid
and also more than a mere withholding of information or the mere furnishing of
misleading information. It is probably safe to say that some blameworthy act or
omission on the part of the taxpayer or those for whom he is responsible, is
contemplated. (emphasis added)
As an example, behaviour that is tantamount to intentionally keeping the Commissioner ‘in the
dark’ may amount to evasion: 4
‘Even where a taxpayer is firmly of opinion that his view is the correct one, he may be
guilty of evasion by seeking to prevent the Commissioner from applying his mind to
some debatable question, e.g., whether a particular item of income should be assessed:
the evasion in such cases consists in the attempt to preclude the presentation of any
opposing view or to exclude its application.’
In a different case, the High Court found evasion where the taxpayer, while knowing its closing
stock values were incorrect, was prepared to lodge returns hoping that the Commissioner
would not review the calculations. 5
Elements
Accordingly the elements to be established on which the Commissioner may form an opinion of
evasion are:
1 an avoidance of tax resulting in a tax shortfall, 6 and
2 a blameworthy act or omission on the part of the taxpayer or their agent/trustee. 7
Discussion
<Address the elements of evasion with respect to the actions and behaviours of the taxpayer/s
and/or their representative/s (or other relevant entity) in light of the material facts which would
lead the Commissioner to form the opinion that there has been evasion.>
2
Officers do not need to cite additional authorities – instead focus on clearly identifying and presenting the
information, facts and evidence which demonstrate the asserted fraud or evasion.
3
Denver Chemical Manufacturing Co v Commr of Taxation (NSW) (1949) 79 CLR; 9 ATD 60
4
Jordan CJ in Denver Chemical Manufacturing Co v Commissioner of Taxation (NSW) (1949) 49 SR (NSW)
at 199
5
Australasian Jam Co Pty Ltd v. FC of T 88 CLR 23
6
Australasian Jam Company Pty Ltd v FCT (1953) 88 CLR 23
7
Australasian Jam Company Pty Ltd v FCT (1953) 88 CLR 23, Kajewski v FCT, <2003> FCA 258, and
Hasmid Investments Pty Ltd v FC of T 2001 ATC 2150, see also paragraphs 43 and 44.
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UNCLASSIFIED
FRAUD OR EVASION SUBMISSION
FRAUD
Relevant Authorities
Derry v Peek contains the leading statement concerning what is meant by fraud: 8
‘…fraud is proved when it is shewn that a false representation has been made (1)
knowingly, or (2) without a belief in its truth, or (3) recklessly, careless whether it be true
or false. Although I have treated the second and third as distinct cases, I think the third
is but an instance of the second, for one who makes a statement under such
circumstances can have no real belief in the truth of what he states.’
In Kajewski the Federal Court has observed that:
Fraud within s 170(2)(a) involves something in the nature of fraud at common law, ie,
the making of a statement to the Commissioner relevant to the taxpayer's liability to tax
which the maker believes to be false or is recklessly careless whether it be true or false.
9
Fraud in a tax context was found where tax returns were lodged with deductions claimed for
non-existent employees. The Court concluded that the statements made in returns 'can only be
described as frauds on the Commissioner of Taxation’. 10
Elements
The elements to be established on which the Commissioner may form an opinion of fraud are:
1 an avoidance of tax resulting in a tax shortfall;11 and
2 representations made to the Commissioner that resulted in the tax shortfall which the
taxpayer:
– knew were incorrect, or
– held no belief in their truth, or
– made recklessly, being careless or indifferent as to whether the representations were
true or false.
Discussion
<Discuss the actions and behaviours of the taxpayer/s and/or their representative/s (or other
relevant entity) in light of the material facts which would lead the Commissioner to form the
opinion that there has been fraud.>
8
9
10
11
Derry v Peek (1889) 14 App. Cas 337 at 373
Drummond J in Kajewski & Ors v. FC of T 2003 ATC 4375; 52 ATR 455 at ATC 4400; ATR 483
Masterman v. FC of T 85 ATC 4015; 16 ATR 77
Australasian Jam Company Pty Ltd v FCT (1953) 88 CLR 23
UNCLASSIFIED
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UNCLASSIFIED
FRAUD OR EVASION SUBMISSION
RECOMMENDATION
It is recommended that the Commissioner form the opinion that in respect of the relevant
<income year(s) and/or tax period(s)> where there has been a tax shortfall, that tax shortfall
was due to fraud or evasion pursuant to:
ƒ Subsection 170(1) item 5 ITAA 1936
(2004-05 and following income years)
ƒ Paragraph 170(2)(a) ITAA 36
(2003-04 and prior income years)
ƒ Subsection 171A(2) ITAA 36
(2003-04 and prior income ‘nil’ years)
ƒ Paragraph 105-50(3)(b) Schedule 1 TAA 1953
<Delete non-applicable provisions>
As a consequence of forming this opinion the Commissioner may amend at any time the
taxpayer’s Income Tax Assessments and/or Activity Statements for the following periods:
Income Tax:
Relevant dates (Notices of Assessment):
Income year
Issue date
Indirect Taxes:
Relevant dates (Business or Instalment Activity Statements):
Tax period Lodgement date
<Insert/delete as appropriate>
UNCLASSIFIED
PAGE 6 OF 7
UNCLASSIFIED
FRAUD OR EVASION SUBMISSION
SNC AND S&ME SPECIFIC INSTRUCTIONS
Referral to Technical Panel: 12
ƒ
ƒ
Date referred to SNC Technical Panel: <Insert date>
SNC Technical Panel approval:
<Insert approval date>
ATO PROCEDURES – AUTHORITY TO AMEND
Amended assessments that are otherwise out of time are not to be issued unless a fraud or
evasion opinion has been formed by an authorised officer.
AUTHORISATION LEVELS
Income Tax
Only EL2s or above are authorised to form such an opinion for income tax matters, see
Taxation Authorisation Guidelines point 1.6.1 (general fraud or evasion determination).
Indirect taxes
Only EL2s or above are authorised to form such an opinion for GST and other indirect tax
matters, see Taxation Authorisation Guidelines point 4.13 (GST and other indirect taxes).
NB: Regardless of the tax/es, the opinion must be formed in the name of the Deputy
Commissioner.
REFERRAL TO DECISION MAKER
Income Tax
ƒ
Date referred to EL2 or above:
<Insert date>
GST and indirect Taxes
ƒ
Date referred to EL2 or above:
<Insert date>
<The Decision Maker completes the Fraud or Evasion Opinion template to record their
opinion based on the information contained in this submission>
12
SNC and S&ME staff are required to refer this submission to the Technical Panel
UNCLASSIFIED
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