A joint investigation by Four Corners and Fairfax Media has exposed alarming behaviour within the Australian Tax Office (ATO) which has sparked calls for more oversight and accountability mechanisms.
The ATO has extensive powers that curtails the notion of innocent before proven guilty
The ATO has extensive powers to investigate and prosecute individuals or businesses that they believe are committing tax fraud. The biggest issue is that if the ATO accuses you of tax fraud, the onus is on you to prove your innocence. The ATO will then proceed to debt collection including forcibly entering a property and searching for documents without requiring a warrant. Even more alarming is the fact that the ATO can instruct a bank to divert income from an individual’s or business’ bank account straight to the tax office which is used to pay off the alleged debt. This happens without the person or business knowing and can happen even when the person is disputing the ATO’s allegations against them.
The most recent Four Corners episode aired accounts from two ATO whistleblowers who reported a toxic culture that was focused on “cash grabs” from taxpayers regardless of their personal circumstances. The ATO targets individuals with the aim of revenue generation which is an abuse of their powers. Taxpayers are unfairly punished without any proof of their guilt and this can have drastic consequences on their livelihoods.
Accountability mechanisms are insufficient
There are very few checks and balances in place to prevent this from occurring. The Inspector-General of Taxation acts as a watchdog but the size of his team is inadequate in monitoring an ATO workforce of 20,000 people. This is clearly a problem and more needs to be done to protect taxpayers and to ensure that the public can trust the ATO to perform their responsibilities in a proper manner. Finally, the Government should accept previous recommendations that the onus of proof should be reversed, and that debt collection should not be launched until it has been proved that a person is in fact guilty of tax evasion. There are now calls for the Minister for Financial Services, Kelly O’Dwyer to hold a parliamentary inquiry into the ATO to provide transparen
If you have been charged with tax-related fraud offences, call us on (02) 9261 4281 to speak to us about your legal options.