ATO Warns Fraudulent JobKeeper Applications Will Be Met With Fines & Jail Time

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The Australian Taxation Office has revealed it has rejected more than 6,500 applications for the JobKeeper program, adding that it will prosecute fraudulent applications. 

The news comes via a report from the ABC, with ATO officials saying it will increase its vetting of applications for fraud and manipulation, and pass details onto law enforcement. 

The ATO has said more than 3,000 of its staff have been assigned to vetting JobKeeper applications in ‘compliance verification’ reviews. These compliance verification reviews have also been deployed across the other COVID-19 stimulus packages to ensure they’re not being taken advantage of. 

These reviews will be handed over to the Australian Federal Police, who has said it will lead criminal investigations where needed, into “suspected fraudulent activity impacting the Government’s COVID-19 stimulus package.” 

“The matters are priority operations of the Serious Financial Crime Taskforce (SFCT), which the ATO leads,” the spokesperson added. “These investigations are ongoing so we cannot add any further comment at this stage.” 

Fraudulent or manipulated applications will be met with steep fines, and even jail time in extreme cases, according to the ATO, which has facilitated $13 billion worth of JobKeeper payments to around 872,482 businesses. 

Will Day, Deputy Commissioner at the ATO has said that their priority remains separating fraudulent payments that should otherwise have gone to organisations in need. 

“The agency has already seen some examples of fraud and fraudulent attempts or people developing schemes to try to steal money from the community,” Mr Day said. 

Mr Day added that the ATO has received tip-offs regarding “a number of dodgy schemes, including the withdrawal of money from superannuation and re-contributing it to get a tax deduction.” 

“If someone recommends something like this that seems too good to be true, well, it probably is,” he added. “It’s important to carefully check eligibility requirements before applying for any of the measures.” 

As it stands, more than 3.3 million Australians are enrolled in the JobKeeper wage subsidy package, designed to keep unemployment figures low. 

A spokesperson for the ATO has said that “at any particular time, we are reviewing between 2 and 3 per cent of JobKeeper applications.” 

“We will identify those who are intentionally defrauding the system and we will use the full force of the law,” they added. 

The tax office has sent more than 8,000 letters to businesses notifying them of their need to repay JobKeeper payments, after wrong-doing was discovered by their compliance verification reviews. 

“We are unable to pay businesses that do not meet the requirements of the law,” they added, however, the spokesperson made it clear that “the ATO will work with business owners to avoid and overcome honest mistakes.” 

Bob Deutsch, senior tax counsel at the Tax Institute has told the ABC that “if there are people really playing games, they’d be doing it in such a fashion that it wouldn’t’ be immediately detected by the ATO.” 

This would suggest the agency is likely to find significantly more fraudulent applications as it continues to vet the 3.3 million it received. 

“If they’ve manipulated the figures by deferring invoices to a later month – that wouldn’t get picked up by an application at the ATO – it would only get picked up subsequently by an audit.” 

“No doubt that will happen in the next six to 12 months,” Deutsch added. 

Ken Phillips, executive director at Self Employed Australia warned a federal parliamentary tax and revenue committee of the potential of a wide scale ‘blow up’.

“I am predicting a blow-up of enormous proportions here that is going to cause mayhem,” he said, “particularly through the small business community.” 

“The ATO have said that they’ll be taking Jobkeeper away for people who manipulate the turnover… we are predicting that there is going to be considerable strife in this area with the ATOs audits.” 

Mr Phillips cited the government’s embarrassing ‘robo debt’ scandal and told the committee that “the scale of automatically generated audits coming out of the ATO is mind-boggling.” 

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