The Australian Tax Office is currently investigating eleven sites across Victoria in relation to alleged phoenix activity and avoidance of tax.
Access without notice has been granted at businesses and residential properties across Melbourne to gather information as part of a long-term compliance action into tax mischief.
Complaints from concerned tax professionals, clients and ATO's own intelligence sparked the action.
Deputy Commissioner Jeremy Geale says it is not a course of action taken lightly and is a method only used in the most serious of cases.
"We are examining a group of tax agents suspected of facilitating phoenix activity and promoting avoidance of tax involving GST, income tax and the failure to remit pay-as-you-go withholding tax payments," he says.
"We suspect the agents have used phoenix techniques to assist clients to avoid paying tax on millions of dollars of income."
"We only use these powers in the most serious of cases, when taxpayers or their representatives refuse to engage with us within a reasonable period of time and where we believe there is a risk of records being moved or destroyed," he said.
The ATO is taking broader action against high risk agents, also known as 'Agents of Concern', to ensure there are significant consequences for the agents as well as referring the agents to the Tax Practitioners Board.
As primary advisers, tax agents have a significant influence on whether small businesses comply with their tax, super and other regulatory obligations.
While the majority of tax agents do the right thing, there are a small number of agents who don't participate appropriately in Australia's tax and super system.
Tax agents who fail to meet the required professional standards may be gaining an unfair advantage over other tax agents and businesses who do the right thing, and often leave their clients with significant consequences and liabilities.
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