A GST fraud wave costing Treasury at least $4.6 billion has been perpetrated by thousands of greedy people falsely asserting they own & trade as a business

 

Financial Review, 14 August 2023:

An explosive wave of fraud that has shaken the Tax Office’s GST system had been building for months before accountants began to notice early last year. By then it was everywhere and no one wanted to talk about it.

“I started seeing it through the office about March of 2022, a few people came in with business files with the ATO – these really large credits going out, big, big credits, unusual credits,” a western Sydney accountant told The Australian Financial Review.

“It didn’t prick my attention. Then I saw a few more, and a few more, and a few more. It kept growing. Tax time came [from July 2022] and it was rampant, absolutely rampant.”

By then, accountants around Australia were realising that the country was in the thick of a multibillion-dollar explosion of GST fraud that had gone viral. It’s the crime wave the Tax Office didn’t see coming.

How big a crime wave? “The inside word among tax officers is $4.6 billion – that is insane,” says the accountant, who like others spoke to the Financial Review on condition of anonymity. “Everyone’s too scared to go up against the ATO.”

The Tax Office has confirmed the $4.6 billion figure, which seems likely to be an underestimate.

It was “the biggest tax revenue fraud against the community in the history of the ATO”, deputy commissioner John Ford said in a speech in May.

The fraud is a simple one that involves individuals using their MyGov account to claim refunds on GST payments that were never made.

While the fraud may be simple, piecing together this invisible crime wave raises questions about why the Tax Office took so long to catch on.

And now it’s tax time again. While the Tax Office insists it has the fraud under control, accountants in western Sydney are painting a darker picture.

“They keep changing [the scam],” an accountant says. “I saw more clients today that [the ATO] didn’t pick up. One guy got $50,000, then another $35,000, then another $25,000.

“He hasn’t had to pay it back. He got this at the end of 2022. This isn’t being picked up as fraudulent activity.

“I’ve seen two more already this morning. One has a debt of $18,000. He tried to get more but was stopped eventually by the ATO.”

A client received $130,000 from fraudulent claims in July 2022 and was not picked up until December. Another client was paid $60,000 last September. How did it get to this?

Banks had been warning the Tax Office about a rising pattern of GST fraud – and freezing suspect accounts – from late 2020. They became increasingly frustrated by the apparent lack of action by the ATO, as they were faced with the decision of what to do with the frozen accounts…..

By mid-2021 the fraud was exploding as social media – in particular TikTok – was full of explainers how to get a “loan” from the government.

In one example cited to the Financial Review a man claimed a $50,000 GST refund in August 2021, then raised another $50,000 several months later. It was only when he tried it again last May that the Tax Office caught up with him.

Read the full article here.

It doesn't come as a surprise that the federal electorate of Page sees a low return from Morrison & Frydenberg's legislated Stage 3 tax cuts

 

Page is a large electorate covering an area from Sapphire Beach in the south to Nimbin in the north on the coastal side, and from Nymboida in the south to the Queensland border on the inland side. The main towns include Casino, Dunoon, Evans Head, Grafton, Iluka, Kyogle, Lismore, Nimbin, Sapphire Beach and Wooli. [Australian Electoral Commission, 2023]

It is one of only two federal electorates found in the Northern River region of north-east New South Wales.

That section of Page electorate that contains Kyogle local government area (LGA) has a SEIFA Index relative disadvantage score of 910 - most disadvantaged part of the electorate. The section that takes in Richmond LGA has a SEIFA Index score of 902, Clarence Valley section a SEIFA Index score of 926 and Lismore LGA section a SEIFA Index score of 954 - the least disadvantaged score in found in the electorate.

Page electorate receives only $57 million in Stage 3 tax cuts in 2024-25, compared with the metropolitan North Sydney electorate whose residents draw in a total of $331 million in that same financial year and the largest total listed in the The Australian Institute April 2023 discussion paper.

If the discussion paper's projections hold true then around half of that $54 million in tax cuts will be received by less than 7,000 people currently living and working in the Page electorate.

 

The federal electorate of Richmond having a SEIFA Index disadvantage score ranging from 973 to 1,003 did not rate a mention in the discussion paper, so at this point in time we are all left to wonder what portion of the Stage 3 tax cuts come to the people of Tweed, Ballina and Byron LGAs.

According to Regional Development Australia, in 2022 the median weekly income for the est.124,5742 people who live & work in NSW Northern Rivers region was between $800 to $999. Therefore half of those in this regional workforce had weekly incomes between $0 and $799 dollars.

A total of 55 electorates (around 36% of all electorates) will receive a higher-than-average benefit from the Stage 3 tax cuts. Only four of these are Provincial or Rural seats and, importantly, each has characteristics that makes it atypical. Specifically, each of these seats either enjoys significant mining industry employment, which pushes up average earnings, or contains a large number of people commuting to capital cities…..

 “Many lower-income electorates and individuals will get comparatively little from this quarter of a trillion-dollar cost to the budget and those electorates are more likely to be rural and regional.

“People living in National Party seats and in Tasmanian electorates are some of the biggest losers from Stage 3 when compared to their city counterparts.

“At the other end, high income earners are more likely to be clustered in the inner metro areas of our largest capital cities which is why inner metro electorates get the largest benefit from Stage 3.

“The Stage 3 tax cuts will cost more than a quarter of a trillion dollars to the budget, which will only put pressure on funding essential health, education and community programs outside major cities.  [The Australia Institute, Discussion Paper, "Divided nation: The Stage 3 tax cuts broken down by city and country electorates", April 2023]

At the level of the individual; Around half the Stage 3 tax cuts go to those earning over $180,000, with the total plan costing more than a quarter of a trillion dollars ($254b). Those on less than $45,000 per year will get nothing from Stage 3. [The Australia Institute, media release, 19 April 2023] 

According to The Guardian columnist and policy director at the Centre for Future Work, Greg Jericho, median-income earners pay up to $1,500 more in tax in 2022-23 than they did in 2021-22, while around 75% of all taxpayers will pay more tax in 2025 compared with what they did in 2022.

GRAPH: The Guardian, 20 April 2023

This should come as no surprise. However, because the temporary financial 'bridge' created by the low-middle income tax offset (LMITO) was in effect extended twice and increased once, in an effort to sow the seed of another Morrison presidential-style election victory, the collapse of that bridge under its own unsustainable weight was inevitable. A fact perhaps not at the forefront of inequalities being debated during the April-May 2022 election campaign.

Like many of Scott Morrison's policy manoeuvres, the downside was not timed to present itself until post-May 2022. 

Now there is time to reflect on the fact that only those earning over $100,000 per year will see a noticeable change in take home pay under the 'flattened' personal marginal tax rate 

system. 

When it comes to income earners in the 25th ($40k pa) to 50th ($65k pa) percentile ranges they are just planned collateral damage, having got little enough from previous stages of the Morrison-Frydenberg long-term strategy to have those in the highest wealth percentile inherit Australia.

Marginal Tax Rate for 2024-05 and financial years thereafter.

https://atotaxrates.info/individual-tax-rates-resident/ato-tax-rates-2025

Note:

• The tax exempt earned income range of 0 to $18,200 has not changed since 1 July 2012. Nor has the marginal personal tax rate for those earning between $18,201 to $35,000 changed since 1 July 2012 when it was increased by 4 cents to 19 cents for every dollar over $18,000 and, both remain unchanged in the new 2024-05 tax schedule.

• From 1 July 2020 the marginal personal tax rate for individuals then earning between $37,001 to $45,000 fell to 19 cents in every dollar earned over $18,200 and remains unchanged in the new 2024-05 tax schedule.

• For those with a current taxable income of between $45,001 to $120,000 their marginal personal tax rate falls by 2.5 cents to 30 cents in the dollar earned over $45,000 as they enter a different bracket in the new 2024-05 tax schedule.

• While wage earners with a taxable income between $120,001 to $180,000 see their marginal personal tax rate drop by 7 cents to 30 cents in every dollar earned over $120,000 and, those with a taxable income between $180,001 to $200,000 will see their tax rate drop 15 cents to 30 cents in every dollar earned over $180,000 in the new 2024-05 tax schedule.

• When it comes to annual earned income of $200,001 per year and higher, the marginal personal tax rate will be 45 cents in each dollar over $200,000. This tax rate has remained unchanged for this income group since 1 July 2006. However, as is indicated by past media reports those in the highest income brackets in this income group are nothing if not inventive when it comes to how much or how little they pay in personal income tax.

• According to the former Morrison Government: "As a result of the Government’s plan, around 94 per cent of Australian taxpayers are projected to face a marginal tax rate of 30 per cent or less in 2024-25". 

Some of the assumptions on which Morrison and Frydenberg built their new tax system can be found at: 

https://treasury.gov.au/sites/default/files/2019-09/foi_2558_document_set_for_release_re.pdf

The Australian multi-agency Tax Avoidance Taskforce is earning its keep in 2022

 

Simply put, the Australian multi-agency Tax Avoidance Taskforce has the role of ensuring multinationals and large businesses pay the right tax.

It can sometimes take decades to induce multinationals and foreign-owned businesses to admit additional tax liability and legal battles have been known to go all the way to the High Court – repeatedly in the case of at least one corporation. 

However there are now runs on the board.

In November 2018 ATO persistence saw the nominally Australian-based multinational BHP Group Ltd settle their longstanding transfer pricing dispute over the amount of Australian tax payable as a result of BHP’s Australian commodities sales through its Singapore marketing business. The agreed amount was calculated as approx. AU$529 million in additional taxes for the income years 2003 to 2018.

In December 2019 the ATO announced that it had managed to retrieve an extra $481.5 million in taxes from Google Australia after an audit investigated its tax practices between 2008 and 2018 and, that it joined the likes of Microsoft, Apple and Facebook who have all publicly stated that they have settled their tax affairs with the ATO and we welcome their transparency. This result brings the increased collections made against taxpayers in the ecommerce industry to around $1.25 billion cash.

Apple Australia reportedly owed $28.5 million in back taxes when it received the ATO bill in 2012.

While Microsoft in Australia is said to have paid AU$39 million during the 2017 financial year to settle its outstanding tax bill.

U.S. multinational Facebook Inc. was obliged to meet a bill of AU$31.3 million in additional taxes reaching as far back as 2009 according to one media report.

In October 2021 U.S. based ResMed Inc. annnounced it had settled its tax dispute with the ATO for the equivalent of US$381.7 million and locked in future tax certainty.

Then came this announcement concerning a mining corporation which asserts that half its assets are situated in Australia…...

Australian Taxation Office (ATO), media release, 20 July 2022:

The Australian Taxation Office (ATO) can confirm a settlement has been reached with Rio Tinto Ltd (Rio). The settlement brings an end to all tax disputes including long standing disputes in relation to Rio’s Singapore marketing hub. The settlement brings Rio’s total payment in relation to the disputes to almost $1 billion.

Deputy Commissioner Rebecca Saint said that the settlement represented one of the largest settlements in Australia’s tax history.

“This settlement is a very good outcome for the Australian tax system,” Ms Saint said.

“Even prior to this settlement, Rio has been one of Australia’s largest payers of income tax for many years, with a strong track record of engaging with the ATO in relation to its tax affairs, albeit with some areas of dispute.

“Rio have announced that the settlement agreed to has secured approximately $1 billion for the Australian community for past years, over and above their tax returns originally filed. Perhaps more importantly, the settlement locks in future tax outcomes, providing certainty going forward.

“This means that additional profits from the sale of Rio’s Australian owned commodities will be taxed in Australia in the years to come.

“The resolution of these matters means that ordinary Australians can have confidence that even the biggest companies are held to account to pay their tax due,” Ms Saint said.

“This result was delivered through the expertise of the ATO’s Tax Avoidance Taskforce. Many ATO staff have worked for the best part of a decade on these audits to deliver an outcome for the Australian community that strengthens the tax system.”

The compliance programs funded by the Tax Avoidance Taskforce, together with robust tax laws provide an important foundation for the ATO to be able to scrutinise activities to address multinational tax avoidance, often involving investigations over many years.

“This settlement reinforces the importance of Australia’s world leading anti-transfer mispricing rules and a tax administrator properly resourced with the capabilities to deal with this type of dispute. The complexity of properly understanding the global affairs of multinationals, and the true drivers of profitability, can take years of rigorous investigation. This is the case even when the multinational is fully engaged, shares information and is motivated to resolve the issue, such as with this settlement.”

The broader impact of the Taskforce in the market has been to reduce the proliferation of profit shifting and transfer mispricing. ATO intervention has resulted in taxpayers shifting their tax position and increasing their revenues being taxable in Australia.

The Tax Avoidance Taskforce has a focus on the energy and resources sector, including commodity exports and marketing hub arrangements.

“The Rio settlement follows the announcement by BHP in November 2018 that they had settled their marketing hub dispute with the ATO. These announcements provide confidence that Australia’s largest iron ore exporters are meeting their income tax obligations and that profit is being retained in Australia,” Ms Saint said.

As of 30 April 2022, the Tax Avoidance Taskforce has helped the ATO raise $26.3 billion in tax liabilities and collect $14.9 billion in cash.

“Australia has one of the best tax performance rates in the world overall, but in particular in the large market. The success of the Tax Avoidance Taskforce has helped us ensure that compliance rates in the large market have reached 92% of tax paid voluntarily, and 96% after compliance activities.” Ms Saint said.

Background

Details of the settlement are covered by confidentiality provisions and the tax secrecy requirements of the taxation law. However, all our large corporate settlements are reviewed by former Federal Court judges to ensure a fair and reasonable outcome for the Australian community.

ATO settlement practices are subject to significant external scrutiny, with the Australian National Audit Office (ANAO) finding that our practices are effective. The ANAO also indicated we have more transparency over large market settlements than any other jurisdiction.

The efforts of the Taskforce have seen several significant taxpayers publicly state that they have settled their affairs with the ATO, promoting unprecedented transparency. This includes the likes of Google, BHP, Apple, ResMed, and Microsoft.

To date only around $120 million in JobKeeper payments appears to have been clawed back from ineligible business and sole trader claimants

 

On 30 March 2020 the Morrison Government announced it would provide a wage subsidy to around 6 million workers who would receive a flat payment of $1,500 per fortnight through their employer, before tax.

The $130 billion JobKeeper payment was expected to help keep Australians in jobs as they tackled the significant economic impact from the COVID-19 pandemic. The payment was open to eligible businesses that receive a significant financial hit caused by the pandemic and provided the equivalent of around 70 per cent of the national median wage commencing in early May 2020 with payments backdated to 31 March.

The first indication that employers were not going to abide by the rules came in April:

By 21 May 2020 media reports began to reveal that a number of employers had been quick to rort the JobKeeper system.

In June 2020 mention began to be made of ‘pop up’ businesses receiving JobKeeper payments even though these businesses were not created until after the wage subsidy scheme was announced.

By 28 August 2020 more than 15,000 businesses have been removed from the scheme after the Australian Tax Office found them to be ineligible.

In that same month it was revealed that at least 25 companies in the ASX 300 had been paying bonuses worth $24 million to executives and millions more in dividends to shareholders after claiming JobKeeper payments.

Come January 2021 and the Australian Taxation Office is still playing catchup with fraud discovered in the wage subsidy scheme and continues in its attempt to retrieve the hundreds of millions in wage subsidy payments it believes have been paid out in fraudulent employer and sole trader claims.

ABC News, 29 January 2021:

Dodgy employers have signed up jailed criminals, people living outside Australia and even the dead to receive $1,500-a-fortnight JobKeeper payments.

These fictitious employees are among thousands of people being pursued by an Australian Taxation Office (ATO) investigation into rorts of the $130 billion wage subsidy program.

"Client is in jail" is one of the categories being scrutinised as a red flag in around 6,000 cases where employers may have created fictitious employees to take advantage of the JobKeeper scheme, hurriedly launched at the end of March last year to keep the economy afloat during the coronavirus pandemic.

Documents obtained using a freedom of information (FOI) application show that, by the end of September, the ATO was investigating 5,974 cases of "inflated employees" in applications for the wage subsidy.

"The reality is you cannot check every application," said lawyer and corporate investigator Niall Coburn.

"So certain things may have been overlooked, but that doesn't stop the Government from now being able to go back and look at the applications in more detail, and that's what seems to be the case here."

Paying the dead

By the end of September, the ATO had 5,974 cases under investigation, with almost a third found to be ineligible. The majority were ineligible because they "involve employers applying under the wrong ABN (business number)".

It noted there "have also been instances of putting spouses 'on the books'," as well as people overseas ("has a valid visa but … out of the country").

A further category of fictious employees were the dead. "Employee in their JobKeeper application that is deceased," the report observed…..

Fraud prevention efforts

In July, the ATO told ABC News 3,000 staff would be doing ongoing reviews of JobKeeper applications.

"At any particular time, we are reviewing between 2 and 3 per cent of JobKeeper applications," an ATO spokeswoman said.

"We will identify those who are intentionally defrauding the system and we will use the full force of the law [to punish them]."

More than 6,500 applications were rejected for a range of reasons, from people making genuine errors to fraudulent behaviour.

In December, the ABC revealed the Australian Taxation Office (ATO) was pursuing criminal investigations into fraud and had issued fines to program applicants who had made false or misleading statements.

BACKGROUND

ABC News, 9 December 2020:

The Australian Taxation Office has 19 active criminal investigations into fraud against the $101 billion JobKeeper scheme.

It has also issued fines to another 19 applicants to the wage subsidy program who have made false or misleading statements, and is considering penalties for another 24.

Since JobKeeper was launched in March, the ATO has clawed back $120 million in payments to applicants who made it into the system but were later found to be ineligible.

"While most businesses and employees are doing the right thing, we have identified concerning and fraudulent behaviour and claims by a small number of organisations and employees," the ATO said in a statement.

The agency declined to comment on whether the criminal investigations relate to employers or employees and would not provide details about any of the businesses involved or when the investigations began.

However, ABC Investigations understands employers and individual workers are being investigated over fraud and abuse of the scheme.

Applicants could face a prison sentence or fines if found guilty of defrauding the scheme……

The fraud investigation revelations come as the Australian National Audit Office (ANAO) considers its own probe into the scheme.

According to its website, the ANAO has flagged JobKeeper for a potential audit next year that would include an "examination of the implementation of integrity measures designed to protect the scheme against fraud and other abuse."

The ATO fraud hotline has received more than 10,000 tip-offs about fraud against JobKeeper, including claims that some employers have not been passing on the full subsidy to their employees.

ABC Investigations has also spoken to workers concerned that their employers may have artificially suppressed their revenue in order to qualify for the scheme, for example by delaying invoicing customers or removing popular items from sale in retail stores.

The ATO says it has initiated 14 of the fraud investigations using its powers under the Taxation Administration Act and has referred a further five cases to the Australian Federal Police's Serious Financial Crimes Taskforce.

Smart Company, 10 December 2021:

A marketing company has been made to repay $22,500 in JobKepeer funding, after the Australian Taxation Office received a tip-off the business was misusing the stimulus payments.

The ATO said the tip-off alleged the marketing company had incorrectly claimed JobKeeper for its employees, which came to a total of $12,000 per month.

The ATO’s investigation found two of the company’s four employees were ineligible for JobKeeper, because one was on work experience and not receiving any wages, and the other was hired after March 1, 2020.

The two remaining employees were eligible for JobKeeper, however, the ATO said their employer did not pay them the full $1,500 per fortnight in some periods.

“We determined that it was not an honest mistake and required the employer to repay $22,500,” the ATO said.

The ATO says it is closely tracking the misuse of pandemic support.

Australian Government admits that it has acted unlawfully since July 2016 with regard to the treatment of debt under its Centrelink income compliance program

On 27 November 2019 the Federal Court of Australia ruled in Amato v The Commonwealth of Australia that the use of data matching between Centrelink and Australia Taxation Office (ATO) records was not capable of providing proof that a debt exists under the Dept of Human Services/Centrelink Income Compliance Program ('robodebt') if that data matching was the only method used to establish such a debt. Therefore the debt was invalid.

The court also ruled that it followed that the garnishee notice given to the ATO was invalid and that the necessary preconditions conditions for imposition of a 10 per cent debt recovery fee were not met.  

The Federal Court made these orders, agreed to by both parties, after the Australian Government conceded that the averaging process using ATO income data to calculate the robodebt was unlawful.

Victoria Legal Aid has posted an explainer of this robotdebt case and its implications for other people who received a debt notice from July 2016 onwards.

Faced with three court cases, including a class action, on 19 November 2019 the Morrison Government finally admitted that automated data matching was a flawed tool, after mainstream media discovered and published the details of departmental email admissions to compliance staff. 

However, the Minister for Government Services has stated that government has no intention of abandoning this data matching scheme entirely. So welfare recipients must wait on the outcome of the class action in the hope that the Morrison Government will finally end its war on the poor and vulnerable.

The question remains as to how long has the Morrison Government has known it was acting unlawfully given it has finally admitted to receiving legal advice to that effect.

ATO grants two month deferral for bushfire victims in New South Wales and Queensland

Australian Taxation Office, media release, 18 November 2019:

The Australian Taxation Office (ATO) today announced that it will grant a two month lodgment and payment deferral to taxpayers impacted by the recent catastrophic bushfires in New South Wales and Queensland.

Acting Deputy Commissioner Andrew Watson said that people affected by the fires should focus on getting their other affairs in order and not worry about their tax obligations at this time.

“We have applied automatic lodgment and payment deferrals to postcodes impacted by the fires, meaning if you’ve been impacted by the fires you don’t need to contact the ATO or your tax professional – we’ve already done it for you,” Mr Watson said.

The quarterly Business Activity Statement (BAS) that would normally have been due on 11 November or 28 November for businesses using a tax professional will now be due on 28 January 2020.

Monthly BAS lodgers also have an extra two months to lodge and pay, with the ATO automatically extending the due date until 21 January 2020 for the form which would normally have been due on 21 November.

Aside from businesses, individuals in impacted areas who have lodged their 2018–19 income tax returns and have received a bill that would normally be due on 21 November 2019 now have until 21 January 2020 to pay.

Mr Watson added that if taxpayers are concerned about their tax obligations, they should feel free to contact the ATO on 1800 806 218 to discuss how the office can support them.

“You can also discuss your options with your registered tax professional, if you have one”.

The ATO will continue to monitor the ongoing situation and make further decisions to include additional areas and/or provide further deferrals as needed.

Automatic deferrals have been put in place for the following 16 local government areas impacted by the bushfires:

New South Wales

• Bellingen
• Clarence Valley
• Coffs Harbour
• Glen Innes
• Severn
• Kempsey
• Inverell
• Mid Coast
• Nambucca
• Port Macquarie-Hastings
• Richmond Valley
• Tenterfield
• Uralla
• Walcha

Queensland

• Noosa
• Livingstone

Employers are reminded that they still need to meet their ongoing super guarantee obligations for their employees.

Automatic deferrals do not apply to large pay as you go withholders.

The ATO is also reminding business owners at this time that it is critical to keep their Australian business number (ABN) information up to date, as it is:

• used by Emergency Services and other government agencies during times of natural disaster
• used by the Government to identify where financial disaster relief is needed to help businesses recover in disaster affected areas, and
• likely to be checked if they are applying for a grant or loan for their business.

Business owners can access, change or cancel their ABN details online at abr.gov.au.All changes made to their ABN online will take effect immediately.

The ATO has more information about help and support options on its website:

ato.gov.au/NaturalDisasters

NSW Norther Rivers "cult' back in the news again

The Daily Examiner, 3 October 2019, p.8:

Almost $600,000 was clawed back from the charity founded by a Northern Rivers “cult” leader after the Australia Taxation Office found it was not entitled to receive tax deductible gifts.

Universal Medicine founder Serge Benhayon, who a Supreme Court jury found was “the leader of a socially harmful cult”, founded the College of Universal Medicine (CoUM) in August 2011.

Mr Benhayon started his “esoteric healing” business in 1999 after what he claims was an “energetic impress”.

Mr Benhayon sued blogger Esther Rockett for defamation but the jury ruled against him, finding most imputations made against him to be “substantially true”.....

ABC News, 13 September 2019:

A Brisbane multi-millionaire who donated $300,000 to a charity associated with a group later found in court to be a "exploitative cult" has said he gave the money freely as a reward for treating his chronic pain.

But software business owner Stephen Ninnes got his cash back, after an Australian Tax Office (ATO) crackdown forced the College of Universal Medicine (COUM) to relinquish almost $600,000 in donations.

The COUM promotes the teachings of Universal Medicine's (UM) multi-millionaire founder Serge Benhayon — a former bankrupt tennis coach who claims to be Leonardo Da Vinci reincarnated.

Mr Ninnes said in hindsight, after damning findings by a New South Wales Supreme Court jury last year in a defamation case brought by Mr Benhayon, "without any shadow of a doubt, I would have nothing to do with it".

The COUM remains a registered charity, despite being stripped of tax-deductable gift registration by the ATO, which found it was not operating a "college" for tax purposes…..

In his failed Supreme Court defamation claim against anti-cult activist Esther Rockett, Mr Benhayon gave evidence that UM followers had given $269,525 towards paying the mortgage.

The court heard UM was a $2 million-a-year business for Mr Benhayon, who had accumulated other multi-million-dollar properties and paid wages to his entire extended family.

It heard Mr Benhayon flies business class for annual retreats in Vietnam and twice-yearly vacations on a British country estate…..

The jury found Mr Benhayon was a "charlatan" who "swindles cancer patients", was "engaged in a healing fraud that harms people" and was "sexually manipulative of his cult followers".

It also found Mr Benhayon had "an indecent interest in girls as young as 10 whom he causes to stay at his house unaccompanied"…..

Documents filed in the defamation case detail the tax office action against COUM, which took $581,775 in donations for its "school building fund" between 2011 and 2015.

But then an ATO investigation found COUM was "not operating a school" because the courses it offered, such as "Being a woman in the world today", did not qualify as "knowledge-based teaching" for tax purposes.

It noted that COUM was fundraising to renovate a building to the "potential capital benefit" of its owner, Mr Benhayon, who would also earn $80,000 a year in rent.

Although there was no indication money was misspent, the ATO found most of the donations to the building fund were not maintained separately to COUM's money, meaning it could potentially use the cash "for other purposes" and "the safeguard of public money is threatened".

In February 2015, the ATO retrospectively stripped COUM's deductible gift recipient (DGR) status and COUM returned $563,282 to donors in October 2015…..

The Australian Charities and Not-for-profits Commission (ACNC) continues to endorse COUM as a registered charity.

An ACNC spokesman said it could not comment on individual charities but "all registered charities must remain not-for-profit [and] have solely charitable purposes".

"The ACNC takes all concerns seriously and will investigate where there is evidence that a charity has failed to comply with its obligations," he said.

Lismore MP Janelle Saffin denounced UM in NSW Parliament last month and called for a judicial inquiry into its "infiltration" of government departments.

"It is a cult that has caused the separation of families, is a wealthy commercial enterprise … and has targeted those who speak out," Ms Saffin said.

"Those who have escaped its clutches, or had their loved ones snared in its web of commerce and bizarre beliefs, have told me of its practices and harm."

UM devotees include medical practitioners, academics, child protection workers, and a police officer.