spotlight has shifted in the Robert Gerard tax saga. I can now reveal
that the DPP can still prosecute Gerard Industries and others
associated with the case irrespective of whether the ATO have settled
the case without penalties. The ATO and DPP guidelines
are quite clear on this subject. Under the Director of Public
Prosecutions Act 1983, the decision to prosecute a person is made by
the DPP independently of the ATO as they are responsible for the
prosecution policy of the Commonwealth.
Even though the Gerard
case was settled by the ATO, its guidelines state: “Where a taxpayer is
advised that there is no intention to commence criminal proceedings it
will be emphasised that this advice does not preclude a reconsideration
of the matter by the DPP.” The guidelines also make it clear the ATO
will not include terms in settlement agreements that prosecution action
will not be taken against any particular taxpayer as only the DPP has
statutory authority to give immunity from prosecution.
cannot offer immunity from prosecution. Nor should it be able to. Any
promise given by the ATO of not prosecuting a taxpayer if the tax is
paid in settlement of the audit is a promise that cannot be kept
– unless the DPP considers that a prosecution is not feasible or not
warranted in the public interest. Such a decision will be made in
accordance with the prosecution policy of the Commonwealth and that can
only be made by the director, Damien Bugg QC, on whom the spotlight is now
completely and relentlessly focused.
A precedent was set in 1992 in the Victorian court of criminal appeal (R v Morris)
when a barrister was sentenced to six months’ jail for tax evasion. The
barrister had previously evaded tax over a nine year period but the
case was settled by the ATO with a promise he would not be prosecuted.
However, some two years after the settlement, the DPP initiated
inquiries into the matter and subsequently prosecuted him. The Director
held the view that despite whatever “guidelines” for the assistance of
Tax Office officials there may be, the responsibility for the
initiation of criminal process was a matter for him and not for the
Australian Taxation Office.
The judge said in his judgment:
“The taxation guidelines have since been altered so that this situation
is unlikely to ever occur again, and the Australian Tax Office will no
longer be in a position, if it follows the guidelines, to give a false
sense of security to a taxpayer as to non-prosecution, and no
fraudulent taxpayer will be in a position to claim a belief or
expectation that he will not be prosecuted.”
Read more on the website.