ATO taxpayer alert
The Australian Taxation Office (ATO) has issued a warning about a new scheme that allegedly offers a tax deduction to settle debts arising from the financing of previous schemes.
The ATO believes the promoter of the scheme offers to settle the financial debt by accepting partial repayment or returning a significant portion of the full repayment to the taxpayer through a round robin arrangement.
The promoter allegedly offers to provide the taxpayer with documents that allegedly support the claim for a tax deduction for the full amount of the financing debt.
Tax commissioner Michael D’Ascenzo urged taxpayers to be cautious when considering the arrangements.
“We will also be considering whether the outstanding debt or the amounts actually repaid by the taxpayer are deductible and whether the general anti-avoidance rules apply.
“In addition, we will be considering the application of the promoter penalty laws to those involved with promotion activities,” he said.
Taxpayers who are concerned about their involvement in these arrangements are urged to contact the ATO.
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