Pheonix Taskforce – targeting dodgy businesses

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The Australian Taxation Office (ATO) has been working hard to combat illegal phoenix activity through the Phoenix Taskforce. This taskforce, which was established in 2014, brings together federal, state, and territory agencies to tackle this widespread problem.

Illegal phoenix activity refers to individuals or companies that deliberately liquidate, wind up, or abandon their business to avoid paying their debts. These individuals often start a new business that is almost identical to the old one, perpetuating the cycle of non-payment and putting honest businesses at a disadvantage.

The cost of illegal phoenix activity to businesses, employees, and the community is estimated to be between $2.85 billion and $5.13 billion each year. To counter this, the Phoenix Taskforce takes action by working to disrupt the business model of phoenix operators, removing their ability to operate, applying financial penalties, and prosecuting the worst offenders. In particularly serious cases, the matter is referred to the Serious Financial Crime Taskforce.

The ATO has also introduced the Director Identification Number (DIN) initiative to prevent the use of false and fraudulent director identities and to make it easier for government regulators to trace directors’ relationships with companies over time.

If you suspect illegal phoenix activity or tax evasion, you can report it to the ATO by completing the tip-off form, calling 1800 060 062, lodging an unpaid super enquiry about your employer, or writing to the ATO and marking the letter “in confidence”.

Stay informed and protect your business by being aware of the dangers of illegal phoenix activity.

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