The ATO has recently advised taxpayers to seek a second opinion on before entering into any tax avoidance schemes.
According to the ATO tax avoidance schemes are designed to appear legitimate, even to savvy investors. In particular taxpayers should be wary of complex financing schemes that rely heavily upon round robin financing schemes and non-recourse loans. Essentially, if the scheme involves reducing you’re your taxable income by declaring deductions that you are not entitled to, it is likely to be illegal.
If a provider tries to dissuade you from telling people about the scheme, or discourages you from seeking a second opinion, you should take this as a warning sign. Claims of ‘risk free’ or ‘zero risk’ tax avoidance schemes should also be treated with suspicion.
Entering into an illegal tax avoidance scheme, even if you were unaware that it was illegal, can result in a hefty tax burden.