Latest news with #ATO
News.com.au
4 hours ago
- Business
- News.com.au
Questions raised after ATO wiped $1m bill from Paul Keating's company
The Australian Taxation Office (ATO) is under pressure to explain why it wrote off almost $1 million in interest and late penalties owed by one of Paul Keating's companies. An ABC Four Corners investigation has revealed that over a decade ago the ATO wrote off the debt in 2015 after years of negotiations. The debt was owed by one of Paul Keating's companies but wiped after negotiations with the former prime minister and his financial advisers. There is no suggestion of wrongdoing by Mr Keating or his advisers. Instead, the focus of the investigation is on why the ATO took the steps it did, given the fact that for most taxpayers formally challenging such a decision would require them to contest the matter in the Federal Court. However, the ABC reports in this instance, a payment notice was cancelled after a negotiation, raising questions about how the ATO chose to handle the matter. At the time, the Liberal Government was led by Tony Abbott and the Treasurer was Joe Hockey. There's no suggestion however that the Abbott Government was briefed on the decision to wipe the tax cut given the sensitivities around privacy and the ATO. The ATO and Mr Keating's office have been contacted for comment. The ABC's report states that the investigation raises 'questions about a lack of transparency in how the tax office conducts confidential settlements.' According to the ABC, an interest and penalties bill was issued after the ATO discovered in 2012 that Mr Keating's company, Brenlex Pty Ltd, had not reported profits from an earlier share sale. After Mr Keating was audited by the ATO in 2010 an agreement was struck according to the ABC for Mr Keating to settle tax liabilities of more than $3 million involving another of his companies, Verenna Pty Ltd. According to the ABC, Mr Keating was questioned about his other companies, including Brenlex, and his advisers confirmed it had paid a significant amount of tax relating to the sale of shares and was up to date with its tax liabilities. However, two years later the ATO discovered in 2012 that Paul Keating's company had not reported profits from a 2004 share sale. While Brenlex agreed to pay the tax debt, the ATO demanded the company pay more than $600,000 in interest and penalties which had accrued in the years since Mr Keating sold the shares. Mr Keating's advisers asked the ATO to write off this debt entirely via an ATO rule known as a 'commissioner's discretion'. The ATO commissioner at the time was Chris Jordan AO, who was appointed as the 12th Commissioner of Taxation on 1 January 2013. Mr Jordan led the ATO during the tumultuous pandemic period and during scrutiny of the ATO's role in the PwC tax leak scandal. does not suggest he was involved or aware of the decision to cancel the debt. According to the ABC, the argument over the tax debt went back and forth until the debt had grown to $904,000, at which point the ATO sent a formal notice to not waive the interest and penalties charge. 'Your request has been fully considered and it has been decided that on this occasion the circumstances detailed do not warrant remission of the GIC,' the notice said according to the ABC. 'There is a clear acknowledgment that the Company should have accounted for the disposal of shares in the relevant financial years returns and did not.' In 2015, Mr Keating's advisers became involved in the correspondence arguing the ATO should waive the bill because it was an honest mistake. As a result, 'the lodgement and payment of the Company returns were overlooked' but the tax office said 'This is not a valid justification'. In July 2015, 'a last-ditch letter from Brenlex was sent to the ATO requesting a meeting' Ten days later, the tax office sent a four-line email writing off the almost $1 million debt. 'I am able to confirm that the GIC and Late Lodgement Penalties … have been remitted in full,' the email said. 'Consequently the balance of the account has been reduced to nil and the amount payable as stated in the Creditors Statutory Demand is no longer owed.' Accounting experts have told the ABC that such negotiations are unfair because the only recourse available to taxpayers to challenge this kind of decision was an appeal to the Federal Court. This is a 'lengthy and complex process that is out of reach of most taxpayers'. The ATO's own website states 'Taxpayers should be aware that remission requests are carefully assessed to ensure a level playing field for those taxpayers who pay on time.' In a statement, the ABC told Four Corners that 'inadvertently overlooking' the need to pay tax was generally not valid grounds on which to cancel GIC. 'However, there may be instances where GIC is remitted when a taxpayer inadvertently overlooks the requirement to lodge a form or make a payment, depending on the individual circumstances of the taxpayer,' the ATO said.
ABC News
6 hours ago
- Business
- ABC News
ATO reversed its own decision to bill former PM Paul Keating's company nearly $1m after three-year battle
The Australian Taxation Office (ATO) wrote off almost $1 million in interest and penalties owed by one of Paul Keating's companies in 2015, in an abrupt about face after negotiations with the former prime minister and his financial advisers. This was unusual because for most taxpayers, formally challenging such a decision would require them to contest the matter in the Federal Court. In this case, the payment notice was cancelled after a negotiation, raising questions about the treatment of powerful people by Australia's chief revenue collection agency. It also raises questions about a lack of transparency in how the tax office conducts confidential settlements. Four Corners does not suggest any wrongdoing by Mr Keating or his advisers in seeking to have the debt cancelled. Four Corners first contacted Mr Keating two weeks ago to request an interview about how this settlement came about, but he declined. The interest and penalties bill was issued after the ATO discovered in 2012 that Mr Keating's company, Brenlex Pty Ltd, had not reported profits from an earlier share sale. This followed a 2010 agreement by Mr Keating to settle tax liabilities of more than $3 million involving another of his companies, Verenna Pty Ltd. At the time, Mr Keating was questioned about his other companies, including Brenlex, and his advisers confirmed it had paid a significant amount of tax relating to the sale of shares and was up to date with its tax liabilities. Mr Keating agreed he would ensure his tax affairs were in order henceforth. However, the ATO later discovered that Brenlex owed $446,000 in tax from the sale of shares years earlier in Lake Technology, an audio engineering company Mr Keating had advised. Brenlex agreed to pay the tax debt, but the ATO demanded more than $600,000 in interest and penalties which had accrued in the years since Mr Keating sold the shares. These are known as a general interest charge (GIC) and late lodgement penalties. Mr Keating's advisers fought to avoid the interest and penalties, asking the tax office to write them off entirely via an ATO rule known as a "Commissioner's discretion". The argument went back and forth through 2013 and 2014. By October 2014, the debt had grown to $904,000, at which point the ATO sent a formal notice to not waive the interest and penalties charge. "Your request has been fully considered and it has been decided that on this occasion the circumstances detailed do not warrant remission of the GIC," the notice said. "There is a clear acknowledgement that the Company should have accounted for the disposal of shares in the relevant financial years returns and did not." In April the next year, the ATO issued Brenlex a formal creditor's statutory demand to pay the debt within 21 days, which had now grown to $953,396. Mr Keating then became involved in the correspondence as part of efforts by his advisers to persuade the ATO to waive the bill because, they said, it was an honest mistake. Mr Keating's advisers told the tax office the former prime minister had mistakenly believed his company Brenlex had paid the tax. They argued he had "inadvertently failed to advise his directors" of the sale, despite filing a substantial shareholder notice reporting the disposal of the Lake Technology shares. Mr Keating's advisers argued "the lodgement and payment of the Company returns were overlooked" but the tax office said "This is not a valid justification". The ATO was told Mr Keating had truly, though incorrectly, believed that all tax matters with Brenlex were up to date. The tax office refused to alter its position. In July 2015, a last-ditch letter from Brenlex was sent to the ATO requesting a meeting. Ten days later, the tax office made a backflip. In a four-line email it wrote off the almost $1 million debt. "I am able to confirm that the GIC and Late Lodgement Penalties … have been remitted in full," the email said. "Consequently the balance of the account has been reduced to nil and the amount payable as stated in the Creditors Statutory Demand is no longer owed." The email gave no reason for the sudden change of heart. The ATO's reversal of its decision, having issued the October 2014 notice, was unusual. Just how unusual can be seen from a joint submission to a Senate committee this year by five accounting bodies. They said it was unfair that the only recourse available to taxpayers to challenge this kind of decision was an appeal to the Federal Court, which was a "lengthy and complex process that is out of reach of most taxpayers". They complained that these decisions were "not subject to an internal ATO review. The only recourse available to the taxpayer is to appeal the ATO's decision in the Federal Court". In a reminder published on its website last month, the ATO said: "Taxpayers should be aware that remission requests are carefully assessed to ensure a level playing field for those taxpayers who pay on time." These revelations come at a time when the ATO's handling of this issue is under review. The Tax Ombudsman is scrutinising the management of general interest charges, to ensure "decisions are fair and reasonable and are made consistently for taxpayers in like circumstances". Typically, the ATO does not comment on the tax affairs of specific taxpayers due to confidentiality obligations. It told Four Corners in a statement that "inadvertently overlooking" the need to pay tax was generally not valid grounds on which to cancel GIC. "However, there may be instances where GIC is remitted when a taxpayer inadvertently overlooks the requirement to lodge a form or make a payment, depending on the individual circumstances of the taxpayer," the ATO said.
Daily Mail
8 hours ago
- Daily Mail
Shocking discovery during luggage check at Perth Airport
An Aussie mum was found to be carrying nearly $200,000 in cash hidden in her luggage after she was stopped at an airport in Western Australia. Footage published by the Australian Federal Police (AFP) on Wednesday, shows the moment security staff found the wads of cash in the 65-year-old woman's bag. The woman, who has not been identified, was stopped by staff at Perth Airport when 'irregularities' were spotted during a luggage screening in October, 2023. After searching her clothes and bag, staff allegedly discovered $191,850 in Australian dollars, along with a small amount of Euros and other currency. The AFP alleges the woman failed to declare the money in her luggage and had told officers it was savings. She also claimed some of it had been given to her by family, including her son and daughter-in-law, authorities said. An investigation by the Criminal Assets Confiscation Taskforce (CACT) found her son and daughter-in-law had purchased six properties in Western Australia. Their value averaged up to about $4.5million in the past six years. The investigation found the couple's spending and asset portfolio did not seem to align with the earnings they had declared to the Australian Taxation Office (ATO). Police alleged the couple 'hid their true earnings' to pay less tax than required. During the investigation, the couple also allegedly purchased a property in Gnangara, in Perth's northern suburbs, worth just over $2million. The taskforce applied to the Perth District Court to have multiple assets belonging to the woman and the couple restrained on June 24, 2025. This included seven properties in Western Australia collectively worth about $6.5million, including the Gnangara property, the almost $192,000 in cash seized at Perth Airport and a bank account containing about $236,000. There is no limit to the amount of cash travellers can bring in or take out of Australia but if it is more than $10,000 it must be declared. Under Commonwealth laws, the AFP can apply to restrain assets or money even when there is no related criminal investigation or prosecution. If legal proceedings are successful, the assets are liquidated and the proceeds placed in the Commonwealth Confiscated Assets Account (CAA).
Yahoo
15 hours ago
- Business
- Yahoo
Tokenized Stocks Expose a Major Tax Reporting Gap in Crypto—Robin Singh
Global crypto tax reporting still has major cracks — and tokenized stocks may be the catalyst that forces the system to catch up. In recent weeks, platforms like Robinhood and Gemini have started offering tokenized stocks to users in the European Union. These blockchain-based derivatives mimic the price of real equities like Apple and Tesla and allow users to trade 24/7, free from the limitations of traditional market hours. That might sound like a leap forward for accessibility and innovation. But if these products continue to gain traction, and firms like Galaxy Digital believe they will siphon liquidity from traditional exchanges, regulators will face growing pressure to close the reporting gap between crypto platforms and traditional brokers. Despite the progress the crypto industry has made over the years, crypto tax reporting is still far behind compared to traditional asset exchanges in many parts of the world. There is still an obvious gap. Take Australia. The Australian Stock Exchange (ASX) provides the tax office with structured data, including sale prices, dates, and proceeds, which is automatically pre-filled into users' returns. For crypto, the ATO's approach is more like a gentle tap on the shoulder to its taxpayers. It presents a notification reminding users to check for taxable events, rather than a detailed pre-filled report. While the ATO knows you are active in crypto because crypto exchanges report you have an account, it does not have the same comprehensive oversight as it does with stock trading. That approach may have been justifiable in crypto's early days, when most activity was tied to speculative tokens or NFTs. But now, with platforms likely wanting to expand their offerings of tokenized stocks globally — which are not yet available in Australia but I dare say it is being considered — the lack of tax transparency becomes much harder to justify. Governments can't afford to let potential tax revenue slip through the cracks simply because they're happening onchain. I believe as tokenized stocks start to gain more and more attention over the coming months, regulators will be scrambling to ensure they are prepared. In the U.S., the IRS is already attempting to catch up. Its new crypto reporting rules, including the long-awaited Form 1099-DA, are set to take effect in 2026. These will require crypto brokers to report user transactions similar to traditional financial institutions. Meanwhile, Robinhood is reportedly preparing to launch tokenized stocks for U.S. customers. It raises a timely question…will that rollout coincide with the new IRS requirements? On a global scale, the OECD's Crypto-Asset Reporting Framework (CARF), also due in 2026, will enforce transaction data sharing across jurisdictions, similar to how banks comply with the Common Reporting Standard. If tokenized stocks are going to mimic real equities then the tax data reporting around them needs to match accordingly. The days of crypto existing in a regulatory gray zone are numbered. Whether platforms are ready or not, the era of full tax transparency is coming and tokenized stocks may be the turning point that forces it into reality. I believe that moment will arrive within the next five years. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Herald Sun
a day ago
- Business
- Herald Sun
'The way I gasped!' Aussies gobsmacked over Gen Z's way of doing their tax returns
A Gen Zer has left older Aussies gobsmacked after revealing how she submitted her tax return this year. In a revelation that would blow the mind of any Baby Boomer, Melbourne woman Paije recently divulged that she does her taxes each year using nothing but her smart phone. 'I just saw a video on my for you page where they were talking about that thing where some purchases you can do on your phone but big purchases have to be on your laptop,' the 28-year-old explained. 'I would like everyone to know that I did my taxes on my phone. I do everything on there.' Want to join the family? Sign up to our Kidspot newsletter for more stories like this. The 28-year-old worker received a lower tax return than previous years. Picture: @princesspeeny/TikTok For more stories like this, visit: Everything is on the phone The laptop Vs phone debate has gained traction in recent years. For Gen Zers who grew up as digital natives, they wouldn't think twice about making big purchases or completing in-depth tasks on their phone. For Millennials and other generations, things they consider 'major' tasks, such as purchasing a plane ticket, are reserved for the laptop, with the idea of being left with nothing but their mobile enough to send them into a panic. So, when Paije made her tax return confession, there were plenty of older Aussies who couldn't comprehend how she could complete such a significant task without whipping out her laptop. 'The way I gasped. Not on your phone,' one person said, with another joking, 'this feels illegal'. 'I didn't think anything at tax time could be worse than people saying getting a return just means you paid too much during the year, then I saw this,' another said. One person branded it 'criminal', adding that flights, tax and online furniture shopping are all laptop tasks. Another added: 'No way, that's definitely a desktop job.' However, there were plenty of people who saw no issue with it, with others claiming it is easier to do your taxes on your phone, particularly if you use the ATO app. 'I haven't opened my laptop since high school in 2019, I use my phone for everything,' one person said. Speaking to Paije said she wanted to tap into the running joke that older generations think some activities should only be done on laptops. 'I suppose I fall into that more Type B personality type and my attitude is that a phone is just a mini computer now,' the 28-year-old said. She also noted that the ATO's myDeductions app has become increasingly user friendly, making it really easy to do your tax return with nothing but your phone. In another video, Paije revealed she was getting a $921 refund after submitting her tax return, a figure she says is the 'worst' she has ever received. While the young worker understands that getting a smaller or no return means you have paid the correct amount of tax throughout the year, she noted that 'it still hurts'. In previous years, after submitting the same kind of deductions she did this year, her return would be in the $1500 to $2000 range. She also touched on her increasing HECS-HELP debt, which is currently sitting at almost $92,000. On June 1, indexation of 3.2 per cent was applied to all student loan debts. RELATED: Easy way to minimise the amount of tax you pay Paije said doing your taxes on your phone is a lot easier than people think. Picture: ATO Hecs and tax - what students need to know While there have been welcome changes to the way indexation occurs, with the lower of either the Consumer Price Index (CPI) or the Wage Price Index applied, there is still a lot of contention around the process. While payments towards your HECS debt are taken out of your pay in real time, that money is not coming off your debt at the same rate. Instead, the ATO holds these funds as a credit until you file your tax return on or after July 1. But, because indexation occurs before this on June 1, your past contributions are actually applying to the higher indexed rate, despite coming out of your pay much earlier. Because of this, many people with student loans feel like they will never see their debts reduce. 'The indexation from the last few years means that you're not really paying anything off because it just gets added again,' Paije said. She has two bachelors degrees and is currently doing her Masters and says the idea of paying off the debt doesn't even cross her mind anymore. 'I don't see it ever happening and so the best thing to do it just ignore it. Since the payments come out of my pay each fortnight I never see the money anyway, so I am kind of just choosing peace and pretending it doesn't exists,' she said. 'It would be too much mental effort that I don't have to care about it.' Originally published as 'The way I gasped!' Aussies gobsmacked over Gen Z's way of doing their tax returns
