The Australian Taxation Office has today issued a press release in connection with its increased investigations into illegal phoenix activity.

As part of the investigation, ATO personnel have (without warning) descended on sites throughout Sydney in order to seize and catalogue records of interest.

Illegal phoenix activity involves the acquisition of a business from a company in financial distress without payment of proper consideration, and usually involves related parties of the insolvent company acquiring the business for no value.  The ATO’s press release states:

Recent figures show that phoenix activity costs the Australian economy up to $3.2 billion each year. Honest businesses suffer the most, losing almost $2 billion in unpaid debts and the non-supply of purchased goods and services.

Historically, authorities have been criticised for their lack of action in pursuing illegal phoenix activity. The recent activity of the ATO makes it evident that this type of activity is no longer being ignored.

For further information, please contact Angelina Kozary.