The Australian Taxation Office is cracking down on family businesses which misuse partnership and trust structures to shift profits and avoid paying income tax, with 75 companies already in its sights. Tax agents who promote the illegal practice are also in the firing line.

The ATO on Thursday said it was targeting arrangements where individuals extracted profits from their business, for themselves or a family member, by funnelling the payments into a purported private company partnership for the purpose of qualifying for the lower corporate tax rate.

The ATO told Fairfax Media it was concerned the "wealth extraction strategy" was being marketed to successful small business owners and professionals who ran their business through trust structures, leading it to fire a warning shot now before it became more widespread.

"We're seeing contrived arrangements where business profits are claimed to be diverted to a partnership and as much as 99 per cent of profits are allocated to the private company and taxed at the 30 per cent corporate tax rate," ATO deputy commissioner Michael Cranston said.