He said he was scammed. The Tribunal preferred what he told the ATO a decade earlier.
Your client gave their TFN, ABN, bank details and email passwords to someone they met through friends. That person lodged false BAS. The ATO came after your client.
They say they were scammed. The Tribunal says intentional disregard. Verma [2026] ARTA 343.
What happened
Mr Verma was a taxi driver struggling with debt. An acquaintance, not a tax agent, offered to help him get money. Mr Verma handed over all of his personal information. False BAS were lodged claiming GST refunds for a non-existent business. $27,102 landed in his account. They split the refunds 50/50.
Mr Verma’s story changed over a decade. At the 2012 audit interview he was explicit: the acquaintance told him he could get GST refunds through false BAS. By his 2023 objection the story became a business loan. At the hearing he said he was scammed and had no knowledge.
The Tribunal found the earlier evidence frank and credible, given spontaneously and contemporaneously. The later versions were self-serving, implausible, and contradictory [33-36]. His own friend warned him the arrangement sounded like fraud [42].
Why intentional disregard
The base penalty was 75% under s 284-90(1) Item 1, Schedule 1 to TAA 1953 for intentional disregard. The Tribunal applied three elements from MT 2008/1, which summarises the relevant case law [46-47]: actual knowledge the statement was false, understanding of the effect of the law, and a deliberate choice to ignore it.
Mr Verma knew the BAS lodgements were false. He knew the purpose was to generate GST refunds he was not entitled to. He authorised someone he knew was not a tax agent to lodge on his behalf, based on a phantom transaction, even after being warned [49-51].
The Tribunal agreed: by willingly providing your details to a third party, you give them authority to act on your behalf and are responsible for their actions [54]. The 20% uplift for repeated malfeasance under s 284-220(1)(c) was upheld [56].
No remission. Future compliance is a baseline expectation, not a mitigating factor [61]. The claimed voluntary disclosure was neither unprompted nor a disclosure; it came only after the ATO began auditing [62].
The practitioner takeaways
First, taxpayers cannot outsource responsibility for their tax affairs and then claim ignorance. Authorising a third party to lodge on your behalf makes you responsible for what they lodge.
Second, contemporaneous statements carry weight. If your client told the ATO one thing at audit and tells the Tribunal something different a decade later, the earlier version will be preferred.
Third, the “I was scammed” defence has limits. Where the taxpayer participated, received money and withdrew it, the Tribunal will look through the characterisation.
General information only. This note was accurate when written. The law may have changed since and the note is not updated. It is not legal or tax advice, does not take account of your circumstances and must not be relied upon as a substitute for advice on your own matter. If the issue is live for you or your client, email arda@nortonquaytaxlaw.com.au for advice on the current position.