Australian actor faces multimillion-dollar bill from ATO
The Australian Taxation Office has accused actor Paul Hogan of evading tax on A$37.6 million of undeclared income, according to a report in The Australian on 13 August 2010. The tax bill is the first punitive action taken against Hogan by the tax office, which along with the Australian Crime Commission (ACC) has been pursuing the actor as part of a tax probe into the use of offshore accounts connected to the Operation Wickenby tax investigation.
According to documents obtained by The Australian, the tax office has told Hogan it is considering him an Australian resident for tax purposes for the years 1987 to 2005. During eight of those years -- from 1995 to 2002 -- Hogan paid tax in the US, where he now resides permanently. From 2002 to 2005, Hogan lived in Australia.
Three payments were singled out as income that should have been declared to the tax office. The first was a A$9.1m payment in July 2002, made at a time when Hogan had stopped being an Australian for tax purposes but had yet to take up US residency. The tax office said Hogan did not pay tax in either country on this income. The reason for the payment is disputed, with some accounts saying it was for the film rights to a proposed Crocodile Dundee IV and others for the rights to use Hogan's likeness for commercial reasons.
The second payment was a dividend of A$14.3m paid to Hogan in the same month. The third payment -- also likely to have been from film royalties -- was a A$14.1m dividend paid to Hogan in June 2005, after he had again left Australia.
Tax advice supplied to Hogan by accountant Ernst &Young said he would not have to declare the dividend if it was paid after he had left the country. But the tax office has told Hogan it considers him an Australian resident for the month and is demanding tax be paid. Hogan had fought to block the release of private records relating to the case, but Australia's High Court ruled on 16 June that they should be made public.
Hogan's artistic collaborator John Cornell and the pair's financial advisor Tony Stewart have been accused in the Federal Court of lodging tax returns that contain "false and misleading statements". The ACC alleges the statements were made to avoid their tax obligations and to "evade paying income tax in Australia". No tax-related charges have been laid against Hogan, Cornell or Stewart, and all have denied any wrongdoing in relation to their tax affairs.
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