ATO Begins Raids On Tax Scheme Promoters

by Philip Morton. Investors Offshore.com

24 May 2002

The Australian Taxation Office (ATO) on Wednesday launched a high profile clampdown on tax scheme promoters with a series of raids on the offices of three Melbourne-based finance professionals believed to have promoted bogus tax-minimisation investment schemes.

Speaking to the Australian press on Thursday, Tax Commissioner, Michael Carmody revealed that the first series of raids had been designed to target promoters of, and investors in, schemes relating to films, theatre, and retirement villages.

'Today's visits focused on promoters who tailor schemes for some of Australia's top income earners,' he said on Wednesday, adding that: 'The purpose of today's visits was to identify schemes which need closer scrutiny and identify high-wealth investors who are trying to avoid tax.'

Following the raids, the ATO revealed that the clients of one of the promoters - all of whom are as yet unnamed - claimed around $210 million in tax deductions after investing in a retirement village scheme, while investors in another scheme, this time involving film tax deductions, received around $40 million in the 1998 and 1999 financial years.

Warning taxpayers to be especially wary as the June 30 end of the financial year approaches, Mr Carmody offered the following advice:

'People considering an investment product should check it has a valid product ruling; (and) they should also get independent advice before signing.' He concluded by quoting the oft-cited (and equally oft-ignored!) rule of investing: 'If it sounds too good to be true, it probably is.'

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