Taxation Law - Failing to Furnish Income Tax Returns - Part 1

The failure to submit Income Tax Returns as and when required by the commissioner of taxation is an offence under section 8C(1)(a) of the Taxation Administration Act 1953. It may be the case that a client has not submitted Tax Returns for a number of years and then the Commissioner of Taxation issues a notice pursuant to section 162 of the Income Tax Assessment Act 1936, requiring the client to submit Income Tax Returns in the approved form for the outstanding financial years.

If the client does not comply with the notice by the required time, the client has committed an offence under section 8C(1)(a) of the Taxation Administration Act 1953 which provides as follows:

Section 8C Failure to comply with requirements under taxation law

A person who refuses or fails, when and as required under or pursuant to a taxation law to do so:

(a) to furnish an approved form or any information to the Commissioner or another person; or

(aa) to give information to the Commissioner in the manner in which it is required under a taxation law to be given; or

(b) to lodge an instrument with the Commissioner or another person for assessment; or

(d) to notify the Commissioner or another person of a matter or thing; or

(e) to produce a book, paper, record or other document to the Commissioner or another person; or

(f) to attend before the Commissioner or another person; or

(g) to apply for registration or cancellation of registration under the A New Tax System (Goods and Services Tax) Act 1999 ; or

(h) to comply with a requirement under subsection 45A(2) of the Product Grants and Benefits Administration Act 2000 ; or

(i) to comply with subsection 82?10F(4) of the Income Tax (Transitional Provisions) Act 1997;

 is guilty of an offence.

These income tax offence matters are prosecuted by the Australian Tax Office (ATO) at the Local Court.  The penalties for failing to submit Tax returns are contained within section 8E of the Taxation Administration Act 1953.

It will generally be the case that after having not complied with the Commissioner of Taxation's Notice to submit Income Tax Returns and after the ATO have commenced their prosecution of the matter, that the client realises the seriousness of the client's failure to submit his or her Income Tax Returns. By the time the matter comes before the Court, it would be prudent for then client to bring up to date all outstanding Tax Returns as well as paying all outstanding income tax liabilities owed to the Commissioner of Taxation.

Of interest to the client is section 19B of the Crimes Act 1914 (Cth). Section 19B is the Commonwealth equivalent to a section 10 of the Crimes (Sentencing Procedure) Act 1999 (NSW) which provides as follows:

Section 19B Discharge of offenders without proceeding to conviction

(1) Where:

(a) a person is charged before a court with a federal offence or federal   offences; and

(b)   the court is satisfied, in respect of that charge or more than one of those charges, that the charge is proved, but is of the opinion, having regard to:

(i) the character, antecedents, age, health or mental condition of the  person;

(ii) the extent (if any) to which the offence is of a trivial nature; or

(iii) the extent (if any) to which the offence was committed under extenuating circumstances;

that it is inexpedient to inflict any punishment, or to inflict any punishment other than a nominal punishment, or that it is expedient to release the offender on probation;

the court may, by order:

(c) dismiss the charge or charges in respect of which the court is so satisfied; or

(d) discharge the person, without proceeding to conviction in respect of any charge referred to in paragraph (c), upon his giving security, with or without sureties, by recognizance or otherwise, to the satisfaction of the court, that he will comply with the following conditions:

(i) that he will be of good behaviour for such period, not exceeding 3 years, as the court specifies in the order;

(ii) that he will make such reparation or restitution, or pay such compensation, in respect of the offence or offences concerned (if any), or pay such costs in respect of his prosecution for the offence or offences concerned (if any), as the court specifies in the order (being reparation, restitution, compensation or costs that the court is empowered to require the person to make or pay):

(A) on or before a date specified in the order; or

(B) in the case of reparation or restitution by way of money payment or in the case of the payment of compensation or an amount of costs--by specified instalments as provided in the order; and

(iii) that he will, during a period, not exceeding 2 years, that is specified in the order in accordance with subparagraph (i), comply with such other conditions (if any) as the court thinks fit to specify in the order, which conditions may include the condition that the person will, during the period so specified, be subject to the supervision of a probation officer appointed in accordance with the order and obey all reasonable directions of a probation officer so appointed.

It may be the case that the ATO prosecutor will oppose an application for the non-recording of a conviction under section 19B on the basis of the importance of a conviction for an offence under section 8C as a general deterrent against the serious offence of failure to lodge Income Tax Returns by the due date.