Goodness, we’ve been campaigning since around 2010 about the bad behaviour of the Australian Taxation Office. It’s one thing for us, a small business advocacy association, to expose systemic ATO misbehaviour. It’s entirely different when an important government agency does the same!
The Inspector-General of Taxation (IGT) is the taxpayers’ friend. It is an ATO watchdog. During the last few months it has released several significant investigations and reports into the ATO. It’s a nasty ATO picture that the IGT paints.
Now mind you, the IGT is much more polite and bureaucratic in the way it exposes the ATO than we are! Yes, our commentary tends to be ‘robust.’ But here are some of the things the IGT has revealed (we’re using our ‘robust’ language).
The ATO can crush your credit rating: The ATO has new powers to report you to credit rating agencies if it claims that you owe the ATO money. Remember, the ATO does not have to prove that you owe money. It only needs to say that you do. This clearly opens up the opportunity for ATO abuse. It’s paradise for ATO bullying! The IGT seems to be concerned. The IGT has put a warning banner across the top of its website with a link to help available from the IGT. It’s almost as if the IGT is warning taxpayers about a potential scam. (Although the IGT does not say this!)
ATO – You owe us money – We don’t have to tell you why!
The IGT has done a detailed study into whether the ATO must give you reasons for any decisions it makes. That is, the ATO explaining why it says you owe money. Incredibly, the report finds that the ATO does not have to give you reasons. There’s all sorts of law that pretends to require the ATO to give reasons. But these laws are so weak that they effectively mean nothing. And far too routinely the ATO does not give reasons.
As a taxpayer you are rubbish. You have no rights
The latest IGTO report released just days ago looks at what ‘rights’ taxpayers do have. Effectively the answer is none!
For example, the ATO has a Taxpayers’ Charter of Rights. But this is ignored by the ATO. Few ATO staff are trained about the Charter. Taxpayers are mostly not told of their ‘rights’ to internal appeal, or referral to the Small Business Tax Tribunal or to the IGT. The Charter talks of ‘fairness’ and other motherhood statements. But in essence the Charter is a public relations cover for what the ATO really does. The Charter is not law but ATO internal policy. It’s rubbish (that’s our term!)
The IGT’s series of reports are important. The reports forensically lay out the actual behaviour of the ATO. What’s highlighted, to us, is that actual law or statute that might require the ATO to operate in a fair and reasonable way is simply non-existent. This surely must not continue.
Reform is possible. We’ve laid out a template for ATO administrative reform that would bring fairness and balance. It’s modelled on US laws covering the IRS.
ATO abuse has to be stopped. This can only be done through legislation.