Project DO IT (disclosure of unreported offshore income): update on ATO activity

Disclosure statistics released

• The ATO has announced that, at 30 June 2014, there had been 166 disclosures, 250 expressions of interest (where taxpayers have identified themselves and said they will be making a disclosure) and more than 600 general enquiries in relation to Project DO IT.
• The ATO has also announced that it is examining and cross referencing information from various sources (including overseas tax authorities, banks and informants) to find people who have undisclosed foreign income.
• The ATO will presumably be using the information gathered from the above disclosures and enquiries in its data matching process.

What this means to you

• If you have any undisclosed foreign income, this increases the chances that the ATO may discover your income. Failing to disclose income can result in serious consequences, including penalties of up to 75% of the tax shortfall (in addition to paying the tax originally payable and penalty interest) and possibly even criminal charges.
• If there has been fraud or evasion of tax, there is no limit to how far back in time the ATO can go to amend your tax returns.

Benefits of voluntary disclosure under Project DO IT

• If you voluntarily disclose the income to the ATO before 19 December 2014, you may be eligible for significant concessions under Project DO IT.
• These concessions include:
  • only being assessed on tax for the years where the time limit for amending your return has not yet expired (generally the last four income years)
  • not being charged by the ATO with any criminal offences, being referred to any other agency for charges or having the ATO voluntarily give your information to any other agency
  • having the tax shortfall penalty reduced to a maximum of 10%
• Who should consider making a disclosure?
• Project DO IT could apply to you if, for example:
  • you have lived or worked overseas
  • you engage in transactions with offshore parties
  • you have any inherited or invested funds or assets overseas
  • you have invested funds or assets overseas
  • you receive any offshore income from an overseas pension or trust fund

Who can make a disclosure?

• Most taxpayers are eligible to participate, provided the ATO is not already investigating or auditing you in relation to the omitted offshore income or capital gains or over-claimed deductions you want to disclose.
• If the ATO detects you first, it states that you will be exposed to the full force of the law, including severe penalties. If this happens, you will not be able to participate in Project DO IT.

Further assistance

If you need to disclose offshore income we can help you lodge an expression of interest. Generally, we will then have 90 days to lodge the full disclosure required. We can advise on your eligibility to participate in this valuable opportunity and the costs and benefits of disclosure. We can assist with the initial expression of interest and the preparation of the disclosure statement. There may also be issues of repatriation of funds or winding-up of offshore structures which we can advise on.

Disclosure statistics released

• • The ATO has announced that, at 30 June 2014, there had been 166 disclosures, 250 expressions of interest (where taxpayers have identified themselves and said they will be making a disclosure) and more than 600 general enquiries in relation to Project DO IT.

 

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