![\"Mining](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2026\/02\/40822b30-0175-11f1-a76d-c573465afcfe.png\")
A Perth man allowed an old acquitance to lodge amended tax returns on his behalf, which resulted in him receiving fraudulent tax refunds. (Source: Getty\/ATO) <\/p>\n A Perth man allowed an old acquitance to lodge amended tax returns on his behalf, which resulted in him receiving fraudulent tax refunds. (Source: Getty\/ATO) <\/p>\n
Australians are being warned not to fall for \u201ctoo good to be true\u201d tax claims<\/a> after a Perth man was hit with a $63,000 penalty from the Australian Taxation Office (ATO)<\/a>. So-called \u201ctax loopholes\u201d have been spruiked on social media that claim you can get back all the tax you\u2019ve paid.<\/p>\n A Perth mining worker found himself in hot water after he was contacted by an old acquaintance on Facebook claiming he had used such a \u201cloophole\u201d<\/a> and \u201cgot every single cent\u201d back. The man subsequently allowed his friend to lodge amended tax returns for him, where fraudulent deductions<\/a> were claimed.<\/p>\n While the ATO initially paid out tax refunds<\/a> for two income years, weeks later it launched an audit into the man\u2019s tax returns and the expense claims. That resulted in the man paying back the ATO the refunds he had received, along with being slapped with a hefty $63,000 penalty on top.<\/p>\n RELATED<\/p>\n Tax Invest Accounting director Belinda Raso told Yahoo Finance many people weren\u2019t aware the ATO could impose significant penalties<\/a> on top of their tax shortfall. This can be 25, 50 or 75 per cent of the shortfall, based on the severity of your behaviour.<\/p>\n \u201cA lot of people are really unaware of this. They don\u2019t realise,\u201d Raso said.<\/p>\n \u201cThey think if I get audited, I\u2019ve made a mistake, or I can get away with it, or only be charged a small penalty. [But] depending on how much they\u2019ve caught you for, it can be a massive amount.\u201d<\/p>\n The Perth man allowed his old acquaintance to lodge amended income tax returns<\/a> using his myGov account.<\/p>\n According to the Administrative Review Tribunal, the man claimed he believed his friend was a tax agent or knowledgeable about tax laws at the time. The arrangement was that if he received a tax refund<\/a>, he would pay his friend 10 per cent.<\/p>\n The amended tax returns included deductions equivalent to his gross income, despite him never incurring these expenses. This meant his income was reduced to nil and he obtained fraudulent tax refunds<\/a> from the ATO.<\/p>\n The ATO ended up paying tax refunds of around $48,100 for the 2020 income year and $36,850 for the 2019 income year. The ATO also issued a notice of amended assessment indicating a refund of around $41,600 for the 2021 income year, but withheld the payment and subsequently commenced its audit.<\/p>\n Do you have a story to share? Contact tamika.seeto@yahooinc.com<\/a><\/p>\n Story Continues <\/p>\n When the man alerted his friend to the amended assessment and penalties, his friend claimed the ATO was \u201cnot a legal entity\u201d and had \u201cno authority to collect taxes\u201d.<\/p>\n It was around this time the mining worker claimed he understood the information he had received was wrong. He then saw his actual tax agent and paid back the refunds he received.<\/p>\n He was given a notice to pay a penalty of around $18,400, $24,000 and $20,800 for the 2019, 2020 and 2021 income years, with the Tax Commissioner considering him to be \u201creckless\u201d and imposing a 50 per cent penalty on the tax shortfalls.<\/p>\n The man disputed these penalties, arguing they were excessive, but the Administrative Review Tribunal affirmed the decision last week.<\/p>\n An ATO spokesperson told Yahoo Finance taxpayers needed to do their own research before making tax decisions, as you are ultimately the one responsible for your own taxes.<\/p>\n \u201cTaxpayers who have questions about the legitimacy of tax information should refer to the ATO\u2019s website or speak to their registered tax professional if they have one,\u201d the spokesperson said.<\/p>\n \u201cAs a general rule, if it seems too good to be true, it probably is. Think twice before acting on information heard from third-party sources, for example, \u2018finfluencers\u2019.\u201d<\/p>\n The ATO also noted it took action against those who promoted unlawful schemes, including through promoter penalty laws.<\/p>\n Raso said she has seen similar \u201ctax loopholes\u201d being promoted by sovereign citizens online<\/a> that falsely claim you can use a detail on your birth certificate to get all your tax back.<\/p>\n \u201cThat\u2019s just a stupid idea,\u201d she said.<\/p>\n The ATO spokesperson also noted claims you could opt out of the tax system<\/a> are pure fantasy.<\/p>\n \u201cThe \u2018sovereign citizen\u2019 type claims promoted by some suggest you can opt out of the tax system, or that the ATO does not have legal standing. These claims have been repeatedly debunked and, if acted upon, are likely to lead to significant penalties,\u201d the spokesperson said.<\/p>\n Aussies seeking tax advice have been urged to approach registered tax professionals and be cautious about \u201cfree expert\u201d advice. You should check the tax agent is registered with the Tax Practitioners Board<\/a>.<\/p>\n If you have been offered or have entered into this kind of scheme, the ATO said you can make a confidential tip-off<\/a>, ask for the ATO\u2019s view through a private ruling, seek independent advice from a registered tax agent, lodge any outstanding lodgements and make a voluntary disclosure to reduce any penalties.<\/p>\n Raso expects more similar cases to pop up in the future.<\/p>\n \u201cIf it\u2019s too good to be true, it is. You will get caught and it won\u2019t just be a slap on the wrist. It\u2019ll be a massive penalty,\u201d she said.<\/p>\n Get the latest Yahoo Finance news – follow us on Facebook<\/a>, LinkedIn<\/a> and Instagram<\/a>.<\/p>\n The man took his penalty to the Administrative Review Tribunal but the decision was upheld. (Source: Getty) <\/p>\n
Tax Invest Accounting director Belinda Raso said many people weren’t aware the ATO could impose these kinds of penalties. (Source: Belinda Raso\/Getty) <\/p>\n