Warning: honesty in your tax returns is essential

In property proceedings you will be required to disclose to your partner during the course of preparation full and frank disclosure of property and income that will include your taxation returns.  If you have been untruthful in these returns and failed to properly or accurately disclose your income and obviously income producing assets then the information at the conclusion of the family law proceedings may be referred to the Australian Tax Office for investigation.

The 2016 case of Binetter v Commissioner of Taxation has clarified the position of the Australian Tax Office in that the Commissioner of Taxation may form an opinion of evasion or fraud from the disclosed material.  Once this opinion has been formed you, as the tax payer, has the onus of disproving there has been fraud or evasion.  There is no requirement in fact that the taxation officer looking at the matter must even give you reasons for taking this view of evasion or fraud.

Take note that you must retain all of your evidentiary material such as receipts, dockets, written material to support your preparation of tax returns and provide this to the Australian Tax Office on request and in particular to disprove the adverse view formed by the Australian Taxation Office of fraud or evasion.

So be prepared that all of this material is not just required for your family law proceedings as there may be more at stake than satisfying the truth of your case to your partner and the judge.  You may be required to verify that deposits do not represent income.  The returns scrutinised may go back many years and not just represent one or two years previous.

If there is such an adverse finding of evasion or fraud make sure that you and your financial advisers respond promptly to any requests for information.  Do not bury the problem as this will go against you and your credibility.  Seek financial and maybe legal advice as soon as