ATO amnesty project targets tax evaders, unlocks money stashed in havens, inherited offshore accounts

Jews who fled Nazi Germany and stashed money in old Swiss bank accounts are among more than 1,000 people taking advantage of an Australian tax amnesty.

The Tax Office has learned of about $550 million worth of assets stored in offshore havens in Europe, Israel and Asia, as part of a project called DO IT.

Accountants and lawyers insist some of the people that have come forward are not tax cheats but have instead inherited a financial headache from their family's migrant past.

"For lots of people, their forebearers came from war-torn Europe", tax lawyer Mark Leibler told the ABC's AM program.

"They wanted to keep nest eggs overseas, not primarily in order to avoid or evade tax, but just as a measure of security."

Mr Leibler said some migrants have struggled to clean up their financial affairs and feared prosecution for several decades.

In some cases the next generation is now dealing with the problem.

"Some are Jewish people, others are Greeks, others are Italians, others are Yugoslavs, I mean, if you look at our multicultural society there's people from all over", Mr Leibler said.

He is urging those people to take part in the amnesty with a guarantee of no prosecution.

Only four years of offshore income is assessed and the maximum shortfall penalty is 10 per cent.

So far, about $105 million in offshore income has been declared by roughly 550 people and another 500 have indicated they will do the same.

Declare before deadline or face penalty

"We are not going to run another initiative like this", Australian Tax Office deputy commissioner Greg Williams said.

"$150,000 is kind of the average income or the income that's being brought forward, but it varies above and below that."

Around $150 million worth of assets is the most declared by one person so far. The money has come from 40 countries including Switzerland, the UK, Hong Kong, Israel and Singapore.

Mr Williams said new migrants with limited knowledge of Australia's tax system and people that have deliberately sent money offshore are also among those coming forward.

"You've got that whole gamut from old money, new money, recent migrants and people sending the money offshore," he said.

"That sort of notion of a tax haven, if it's not actually dying I think it's in a serious decline."

Robert Jeremenko from the Tax Institute, which represents tax agents, said that decline is due to the number of information swap treaties Australia has with other countries.

"[Those treaties] are really creating a situation where there's pretty much nowhere to hide and there shouldn't be for people who should be declaring their income in Australia," he said.

Mr Jeremenko said the tax office will want to find a lot more assets before the projects ends.

Mr Leibler is warning there could be dire consequences for people who do not come forward before the mid-December deadline.

"What the tax office will do is they will take that amount of money, they will assess it all as if it's income, which means that in many cases half of it goes away in tax and then on top of that, since there's tax avoidance and evasion involved, they can put on a penalty of 90 per cent and then there's interest on that," he said.

"So, the starting point of the tax office is they'll take all your money and ask for a bit more."