Alfred, married with 2 children, is a concreter, whom the ATO happened to audit. In the tax year in question Alfred had declared taxable income of $21,000. Alfred had also taken the family back to Europe for a holiday that year. The ATO has noted that Alfred had been reporting a very low level of taxable income for many years.

During the audit, the ATO noted that Alfred had only reported four concrete purchases for one quarter. Information from the ready mix supplier showed that Alfred had actually made 18 purchases, several of which were paid for with cash. Information from Alfred's customers also showed several jobs completed for cash, which were not recorded in Alfred's books.

When given the opportunity to amend his books and his tax return based on this evidence Alfred refused.

Identify and explain by what means the ATO were able to identify Alfred as a potential tax evader, and what is the most likely outcome for Alfred, given that his record keeping was inadequate?

Answer rating: 100% (QA)

The ATO was able to identify Alfred as a potential tax evader through several means 1 Discrepancies ... View the full answer