You’ll be aware of our ongoing heavy criticism of the Australian Taxation Office in their treatment of small business people. In our view:
‘Mum and dad’ businesses are targeted by the ATO with unfair, even questionably legal, tactics.
And as just one example, we successfully defended Rod Douglass from baseless ATO accusations of fraud/evasion.
Further, with the recent resignation and investigation of a top Deputy-Commissioner over a massive tax fraud scandal, the administrative and investigative systems of the ATO are suspect.
We certainly have lost trust and faith in the fairness and impartial application of tax law by the ATO in relation to small business people.
Well, now the Inspector-General of Taxation (IGT) has announced a wide-ranging review into the practices of the ATO. We’re pleased to observe that, according to the IGT, the “Review is being conducted at the request of the Commissioner of Taxation…” We congratulate the Commissioner, Chris Jordan, in taking this initiative. It’s necessary if the integrity of the tax administration system is to be assured.
We’ll be putting in a substantial submission drawing heavily on earlier submissions we have made as follows:
- ICA Submission to Parliamentary Tax Office Review of ATO Scrutiny [March 2016]
- ICA Submission to Inspector-General of Taxation [December 2015]
- ICA Submission to Board of Taxation Review [2014]
And adding our more recent learning experiences in undertaking the legal defence of self-employed people who found themselves under ATO attack.
To understand the scope of the Inquiry, here are some quotations from the IGT’s website:
- …this review will focus on the future taking into account technological, social, policy and regulatory changes.
- Products that transfer risk to third parties, such as taxpayer audit insurance and professional indemnity insurance, may be other areas for future development.
- Work patterns are also changing as seen in the ‘gig’ economy where workers are engaged on a contractual or project-by-project basis rather than full-time employment, particularly impacting in-house corporate specialists.
Under the Terms of Reference the IGT will look at:
3. How the ATO and the TPB can seize the opportunities presented by technological, social, policy and regulatory developments to:
a. work with the tax profession in providing contemporary, reliable, accessible and secure services that foster voluntary compliance by meeting the increasing expectations of taxpayers and tax professionals and improving their productivity;
Note that we’ve emphasized the words ‘voluntary compliance’. This is because the ATO’s systems are so dysfunctional and impossible for ordinary people to understand or work with, that ‘voluntary compliance’ by ordinary people is uncertain, presenting significant risk.