Finance reporter Alexis Carey explains who the ATO is targeting this year, what changes are coming on July 1st, and how to avoid getting caught out by the tax man.

A beautician who boasted about her holidays, expensive designer clothes and jewellery while lying about her income is one of thousands of tax dodgers to have been caught out recently.

The Australian Taxation Office today revealed it has received a record-breaking 15,000 tip-offs to its Tax Integrity Centre in the first quarter of this financial year as the agency continues its crackdown on the black economy.

That equates to a staggering 230 tip-offs per day from concerned informants keen to dob in tax dodgers who refuse to pay their fair share.

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In one day in early August alone the ATO received almost 300 tip-offs.

According to the ATO, the most common tax rorts include not declaring income, not reporting sales, demanding cash from customers and paying workers “cash in hand” and having a lifestyle which does not match income.

The hospitality industry – which employs more than 800,000 people – is the biggest offender, followed by the hairdressing and beauty, building and construction, and cleaning industries.

Examples of tip-offs from concerned citizens include a man who built a new house and bought a new car despite “supposedly having $0 income” and a mobile hairdressing and makeup business owner who boasted about fancy holidays and “expensive designer clothes” and jewellery – while getting paid cash in hand with an ABN that didn’t match the business names.

Another was dobbed in for continually selling expensive items including cars on Facebook and Gumtree while not lodging a tax return in nearly a decade, while a painting sub contractor was also reported for being paid cash in hand and failing to report his true income.

ATO assistant commissioner Peter Holt told news.com.au all tip-offs were investigated and could lead to tax dodgers being audited with hefty penalties imposed.

And earlier this year, a 31-year-old Indian national who was in Australia studying computer networking was sentenced to two years and three months in prison for his involvement in a tax fraud and crime scheme which was first reported via a tip-off from the community.

Mr Holt said he wasn’t surprised by the deluge of tip-offs as the ATO had improved its reporting system and because greater public awareness had caused Australians to become increasingly fed up with tax cheats.

“The community has spoken loud and clear … honest business owners and workers have had enough of people cheating the system to gain an unfair advantage, and they’re not hesitating to let us know,” he said.

“The black economy means the community is missing out on vital public services like healthcare, schools, roads and other vital infrastructure we all rely on.

“Honest businesses out there trying to make an honest living are also seriously disadvantaged by those doing the wrong thing … and those employees being paid cash in hand are possibly not getting their full entitlements.”

Mr Holt said the black economy was estimated to be as large as $50 billion a year – or around three per cent of Gross Domestic Product.

He said those who had made an honest mistake should talk to a tax professional and “immediately come forward” to make a voluntary disclosure.

Mr Holt said tip-offs were coming from all sectors of the community, including past and present staff members, suspicious friends and acquaintances and even those who overheard a dodgy boast at the pub.

He said those intentionally doing the wrong thing were on borrowed time.

“A tip-off from the community could be the missing piece of the puzzle we need to successfully audit or prosecute someone who is illegally operating in the black economy, so we really value and rely on the community letting us know when something doesn’t add up,” he said.

A record 53 per cent of people who provided a tip-off in the first quarter of the financial year provided their contact details to the ATO, a significant increase from the previous period.

The ATO plans to visits 10,000 businesses this financial year as part of their strategy to deal

with the black economy.

A tip-off can be made anonymously or otherwise by completing a form on the ATO website or in the “contact us” section of the ATO app or by phoning the Black Economy Hotline on 1800 060 062.

For more information visit the ATO website.