Convicted phoenix company operator James Soong has been sentenced to three years in jail for failing to pay $6.7 million to the ATO.
The ATO said between October 1995 and July 1998 two companies operated by Soong deducted tax instalments totalling $6.7 million from employee wages. These funds were not paid to the ATO.
The case is an example of a 'phonenix' arrangement where a company is deliberately liquidated to avoid paying debts.
“Phoenix activities... take deliberate steps to disguise themselves from creditors such as the ATO [and] can be hard to identify and prosecute, so our main focus is stopping the activity before it occurs,” ATO tax commissioner Michael D'Ascenzo said.