Seemingly acting on orders from the Federal Department of Nothing Better To Do*, the Australian Taxation Office has begun cracking down on tax cheats in the music industry, looking to uncover millions of dollars hidden by our homegrown musicians and composers.
As Tone Deaf reported back in August, the ATO used its coercive powers to secretly obtain the details of $800 million in royalty collections and payments for the three years to 30th June 2013 from royalty agency APRA AMCOS.
At the time, reports indicated the ATO would be comparing the records against their existing tax records to identify instances where artists, companies, bands, and other industry members had dodged declaring royalty or copyright income.
The Herald Sun now reports the crackdown has begun and no one, not even some of our biggest rock and pop stars, will be spared. An ongoing check on a sample group of 1,000 has already uncovered more than half a million dollars in undeclared royalties.
ATO legal officer Jennifer Saultry told News Corp the $512,575 in breaches was not a final figure, as the project was ongoing. The financials of more than 15,000 individuals and 1,000 companies will eventually be checked.
Predictions are that the total of undeclared cash will eventually rise to more than $8 million, which amounts to $1 of every $100 in royalties paid. It’s not clear how much more would be yielded if the ATO applied the same manpower to auditing tax-cheating corporations.
Regardless, the ATO’s initial sample included 970 individuals and 30 companies, with all the identified breaches involving individuals. The royalty records of these composers, songwriters, lyricists, music publishers, and copyright owners were electronically crossmatched with their tax records.
The ATO reportedly refuse to reveal just how many individuals have so far failed to meet their obligations and could not say what their roles in the industry were.
Considering the high profile of some of the musicians involved in the investigation, the ATO has restricted access to the records to a small group of investigators.
However, we know that even international stars like Iggy Azalea and 5 Seconds of Summer, as well as local legend Jimmy Barnes, will be subject to the scrutiny of the ATO’s new industry audit.
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Naturally, hundreds of unknown industry professionals will be ensnared in the crackdown, which will also check producers of CDs, DVDs, albums, and digital music.
“This data matching program will assist the ATO to identify taxpayers that may be operating outside the taxation and superannuation systems,” ATO Assistant Commissioner Darryl Richardson told News Corp back in August.
“It’s helping us ensure that there is a level playing field for all taxpayers. Not only by identifying those who are deliberately doing the wrong thing but also by helping us to provide people who want to do the right thing with the information they need. Based on this analysis we will tailor our compliance approaches.”
At the time, it was reported that the ATO expects the cost of conducting its wide search for music industry tax cheats will be offset by the extra revenue and fines it expects to find.
*Note: Not a real department of the Australian Federal Government.
