The ATO is warning taxpayers who may be thinking about pausing, changing or closing their business, due to the current economic conditions, to be wary of untrustworthy advisers who may recommend inappropriate or illegal behaviour.
This could include illegal phoenix activity, where businesses intentionally remove their assets prior to winding up so that they can be used in a copy of the original business.
Red flags include:
- people the taxpayer doesn’t know cold calling with advice;
- unsolicited letters, emails or phone calls after the taxpayer has been through court action with a creditor;
- advice to transfer assets to a third party without payment;
- refusal to provide advice in writing;
- advice suggesting they have a sympathetic liquidator who will protect the taxpayer’s personal interests and assets;
- advice to withhold certain records from the bankruptcy trustee or liquidator, or provide incorrect information to authorities; and
- advice to deal with the liquidator or trustee on the taxpayer’s behalf.
The ATO instead recommends anyone thinking of pausing, changing or closing their business to contact a qualified professional, such as an accountant, lawyer, or registered liquidator.
To get some peace of mind and ensure that you have the right advice contact us for a FREE Business Health Check.
Please Note: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.