Expert Tax Fraud and Evasion Lawyers

 Expert Tax Fraud Lawyers

The tax defence lawyers at O’Sullivan Legal are eager to represent you regarding any and all matters relating to financial law.

Who are we?

O’Sullivan Legal is a law firm based out of Sydney that also serves clients Australia wide. We are a close knit team of professional solicitors that aims to provide legal counsel and representation to all Australians.

We know many elements of the law can be tricky for someone to deal with especially if it’s their first time under legal scrutiny. This is why we take a friendly, client focused approach to each and every case.

What is tax fraud/evasion?

Fraud or evasion is a federal crime that is taken very seriously. The seriousness of the matter means that anyone charged with an offence needs a criminal tax lawyer to represent their best interests.

The term ‘tax fraud’ is an umbrella term for a number of individual offences relating to a section of white collar crime. The penalties for these offences can often include fines or even imprisonment for up to a decade.

Some vital information you need to know about tax fraud:

• Because taxation levies money from everyone for the public good, evading payments is seen as a crime against society as a whole.
• If charged with fraud, you are being accused of being dishonest in regards to your finances in order to evade paying your fair share.
• The offence is detailed under Section 61 of the 1997 Taxation Administration Act.
• The law states that the prosecution must prove that the defendant, by deliberate act or omission had evaded or attempted to evade their financial obligations.

  The two main offences relating to fraud are:

• Gaining a financial advantage by deception. This means the prosecution must prove you gained a financial advantage by lying to a government entity, most commonly the ATO (Australian Taxation Office).
• Conspiracy to defraud. This is when two or more people have conspired together to obtain a financial gain for a third party by deceiving a government entity.

• Criminal conviction of fraud can, like most crimes, seriously affect someone’s employability and sometimes their ability to travel overseas.
• The definition of evasion is determined by the ATO and there is a fine line between legal tax reducing measures and being seen to actively avoid paying your fair share.
• The Tax Assessment Act 1981 introduced the ‘dominant purpose’ test that attempts to distinguish between acts of evasion and avoidance by determining the sole purpose of the accused party. If it is found that the accused was deliberately trying to avoid their fair share of payments, it is considered fraud or evasion.

The fluid nature of this area of law is something that most people will struggle understanding and that’s why it’s so important to hire a tax lawyer to help you avoid an unfair sentence. O’Sullivan Legal understands the difficulty faced by people accused of these offences and wants to help them achieve the best outcome.

The difference between avoidance and evasion

Both terms could be considered interchangeable by a lawyer and even professionals can find it hard to distinguish them without training. It’s true that these terms are actually quite different in what they can mean for someone accused of an offence.

Essentially the difference between the terms boils down to legal vs illegal methods of reducing your payments. This is where a line is drawn in what a company can do to minimise their total payout to the ATO.

Tax evasion

Evasion or fraud is a criminal act. This involves methods used by someone as a legitimate measure to avoid paying their fair share to the ATO.

This usually comes in the form of:

• Falsified documents or non-lodgement of tax returns
• Scams or conspiracies to reduce payments
• Misuse of deductions and offsets
• Failing to claim GST
• Not reporting cash wages
• Failing to pay super entitlements to employees
• Failing to forward money withheld from employee wages to the ATO
• Paying employees with cash and thus failing to deduct from their wages

Essentially evasion is when a business or individual has deliberately misrepresented their financial obligations, knowing the full extent of their actions.

Other important information about evasion/fraud you should know:

• The decision on what actions constitute a case of evasion is left with the court system.
• The ATO works alongside the courts to set guidelines and standards for identifying and prosecuting evasion.
• Conduct is only considered to be criminal when it is identified by the ATO or if a challenge is made by the courts.

Tax avoidance

Avoidance or minimisation refers to the measures defined within the law that can be used by a business so they do not pay any more money than necessary. However, some of these measures can be misused and then become a form of evasion.

These measures are less likely to be flagged during an audit because they are attempting to follow the law. This is in contrast to blatant attempts to get out of paying which constitutes evasion.

Some vital facts about tax avoidance/minimisation you should be aware of:

• It is not a crime and is sometimes encouraged by the ATO as a fair way to promote businesses by reducing the amount necessary to pay.
• It is used by accountants and financial solicitors as part of company planning to ensure that as much money as possible is saved.
• It is seen as a legitimate practise by companies when done sincerely.
• Those accused with evasion may attempt a defence that tries to prove what they did was an act of avoidance or minimisation. If the accused can prove that there was an alternate purpose to the avoidance strategy that is seen as a legitimate it will not be counted as an attempt at deliberate evasion.

The differences between evasion and avoidance can make or break a defence against a criminal charge and therefore those accused with a crime relating to tax should call O’Sullivan Legal to request a tax fraud lawyer.