ATO Fraud or Evasion: How Far Back Can the ATO Amend Your Tax Returns?

Most taxpayers assume that once the usual amendment period has passed, an old tax assessment is effectively closed. A fraud or evasion opinion can change that.

For many taxpayers, the ATO generally has either two years or four years to amend an income tax assessment. But if the Commissioner forms the opinion that there has been fraud or evasion, those ordinary time limits may fall away, allowing the ATO to revisit much older income years.

In this episode of Explain That by Velocity Legal, Andrew Henshaw is joined by Tyson Bateman to discuss what fraud or evasion means in Australian tax law, why these allegations can change the course of an ATO dispute, and what taxpayers should consider when the ATO raises concerns about older assessments.

The discussion covers:

• the ordinary two-year and four-year amendment periods;
• why fraud or evasion can allow the ATO to amend outside those time limits;
• the difference between an incorrect tax position, evasion and fraud;
• why evasion can be difficult to identify in practice;
• how the ATO forms a fraud or evasion opinion;
• the Administrative Review Tribunal’s decision in Kirtlan and Commissioner of Taxation;
• reliance on accountant advice in tax residency disputes;
• why advisers need to be fully informed before advice is relied on;
• the importance of records, emails and contemporaneous evidence; and
• why engaging with the ATO before an amended assessment is issued can matter.

This episode is useful for taxpayers, business owners, private clients, accountants and advisers dealing with ATO audits, tax residency issues, amendment period disputes or fraud and evasion allegations.

For advice on an ATO audit, tax dispute, fraud or evasion allegation, amendment period issue or tax residency dispute, contact Velocity Legal’s Tax team.