Most taxpayers understand that the Australian Taxation Office (ATO) has a limited period to amend a tax assessment. In many cases, that period is two years or four years, depending on the taxpayer.

However, those amendment periods no longer apply if the Commissioner forms the opinion that there has been fraud or evasion. In those circumstances, the ATO may be able to amend assessments many years after they were originally lodged.

In this episode of Explain That by Velocity Legal, Andrew Henshaw is joined by Tyson Bateman to discuss what fraud or evasion means in Australian tax law, why these allegations matter, and how they can significantly affect the course of an ATO dispute.

Understanding the ATO's Amendment Periods

The discussion begins with an overview of the ordinary amendment periods that apply to income tax assessments.

For most individual taxpayers and small taxpayers, the Commissioner generally has two years to amend an assessment, while other taxpayers are generally subject to a four-year amendment period.

These time limits are intended to provide taxpayers with certainty about their tax affairs. However, if the Commissioner forms the opinion that there has been fraud or evasion, those limitations fall away.

What Does Fraud or Evasion Mean?

The episode explains that fraud or evasion in tax law is different from the criminal concepts that many people associate with those terms.

While fraud is generally easier to understand, evasion is not defined in the tax legislation and has instead developed through decades of case law. The discussion explores why evasion is often difficult to identify in practice and how it sits somewhere between an innocent mistake and deliberate fraud.

Kirtlan and Commissioner of Taxation [2025] ARTA 539

Andrew and Tyson discuss the Administrative Review Tribunal's decision in Kirtlan, one of the rare cases in which a taxpayer successfully challenged the Commissioner's allegation of evasion.

The case involved Australian tax residency and whether the taxpayer had relied on advice from a fully informed accountant when lodging his tax returns. Although the Tribunal indicated the taxpayer's residency position was likely incorrect, it found that acting on advice from an adviser who had been fully informed of the relevant facts did not amount to evasion.

The discussion highlights the importance of obtaining specialist tax advice where the law is uncertain and ensuring advisers have all relevant information before advice is provided.

Responding to an ATO Fraud or Evasion Allegation

The episode also explains the ATO's internal process before a fraud or evasion opinion is formed.

Andrew and Tyson discuss why engaging with the ATO early can be important, particularly before an assessment is issued, and why taxpayers face additional challenges once a fraud or evasion opinion has been incorporated into an amended assessment. They also discuss the practical importance of maintaining records and contemporaneous evidence, particularly where historical transactions are later reviewed.

The Takeaway

Fraud or evasion allegations can fundamentally change an ATO dispute because they remove the ordinary amendment periods that many taxpayers rely upon.

As Andrew and Tyson explain, obtaining specialist advice early, ensuring advisers are fully informed of the relevant facts, maintaining appropriate records and engaging with the ATO before a fraud or evasion opinion is formed can significantly affect the trajectory of a dispute.

🎧 Listen to the full episode of Explain That by Velocity Legal for a practical discussion of ATO fraud or evasion allegations, amendment periods, Kirtlan, and the importance of obtaining specialist tax advice when dealing with complex tax issues.

If you require advice on an ATO audit, tax dispute, fraud or evasion allegation, amendment period issue or tax residency dispute, contact Velocity Legal's specialist Tax team. We regularly assist businesses, private clients and professional advisers in resolving complex disputes with the ATO.