This short video answers the question ‘can I go to jail for not paying my tax debt?’
In this video I answer the question:
‘Can I go to jail for not paying my tax debt?’
The answer is, no, you can’t go to jail just because you haven’t paid your tax debt.
But there are a couple of tax-related issues that could see you in jail. So let’s have a chat about those.
The first thing is, you could go to jail if you haven’t lodged your income tax returns, your BAS or some other tax-related document on time. The tax office can and does prosecute people for this, and I have represented a lot of people in this situation.
Usually you couldn’t go to jail for your first offence – but if you’re a repeat offender then it is possible that you would see the inside of a jail cell. You might be able to be released on something like a good behaviour bond or similar, which means you wouldn’t spend any time in prison. But, absolutely, if you don’t lodge your tax returns, then there is a potential to end up in jail.
The second kind of offence is a set of offences that are really about how you deal with the Commonwealth Government. So these can apply to things like tax, but also other things such as Centrelink payments.
There are quite a few of these offences – but they’re things like ‘obtaining a financial advantage by deception’.
Probably best illustrated with an example. A good example of this is where somebody lodges a BAS in which they claim huge GST credits for expenses that they haven’t actually incurred. The idea there is that they’re looking to get a big GST refund but they haven’t actually spent any money on GST. So in that situation, they would be getting a financial advantage through deception.
These offences don’t come up very often – hopefully that’s because people aren’t actually doing this very often – but they’re very serious. They’re a lot more serious than the offences for not lodging tax returns, and you’re absolutely much more likely to spend time in jail for one of these offences. So don’t do it.
So there you have it – you can’t go to jail simply because you haven’t paid a tax debt, but there are other tax-related issues that could see you spend time in jail.
- How does the ATO collect tax debts?
- 16 tips for going to Court for not lodging your tax returns
- Have you been issued a summons to attend Court for not lodging tax returns?
About Hartigan Law
I am a specialist tax disputes lawyer with over a decade of experience in dealing with the ATO.
I’ve helped many clients to deal with their tax debt and represented many clients who have been prosecuted by the ATO.
I work with clients all over Australia. I can do this because most of the tax issues I deal with are Federal and are the same no matter where in Australia you live. There are some criminal prosecutions that I cannot help with if you are not in South Australia.