Former ATO auditor Chris Seage writes:

Since Michael D’Ascenzo
took over stewardship of the Australian Taxation Office at the start of the year
he has made a nasty habit of putting his foot in his mouth on more than one
occasion. For instance, in yesterday’s
Daily Telegraph,
Terry McCrann compared Mr D’Ascenzo’s declaration that he’d won the battle
against mass-marketed tax avoidance schemes to George
Bush’s “mission accomplished” claim over Iraq. I’m told there were howls of laughter from
the tax investigation area of the Sydney Tax Office when D’Ascenzo made this
faux pas. Tax investigators know too
well that as long as there are tax laws there will be smarties trying to drive
Mack trucks through the loopholes that politicians often leave in

was on top of the clanger he made in his maiden speech in
January where
he naively boasted “who cares” when talking about complexity in tax laws. Try telling that one to the thousands of tax
agents who burn the midnight oil trying to keep pace with the constant changes
in tax law so their clients are not subjected to the penalties or prosecution
the ATO pursues with pitiless abandon if a taxpayer makes an innocent mistake in
their tax return. Not to mention the
huge costs to small and big business from trying to comply with the
tax laws. It’s a safe bet to say they

are also concerns from the Operation Wickenby bunker that D’Ascenzo’s claim that
the first phase of prosecutions relating to major tax fraud will commence by the
end of the year is looking very shaky.
There are fears by investigators that the ATO will be caught up in legal
fights due to the high profile and wealth of the people involved. There are also issues about garnering proper
evidence as information is held by overseas tax haven

D’Ascenzo made a recent appearance at a parliamentary committee
where he was grilled by Labor’s Nick Sherry about secret audit
settlements with Corporate Australia. In
the wake of the Robert Gerard tax fiasco he was at pains to stress to the
committee that every audit that was settled by the ATO was above board,

“I am putting the argument
here to this committee that there is a very serious and sound process of checks
and balances so that these arrangements are done ultimately in a very proper
way, and in a way that ultimately benefits the Commonwealth, or is seen to be
benefiting the Commonwealth. They usually involve a range of other players,
including external counsel. It is very important in terms of community
confidence that not only does that message get through but also everything is done
that is reasonably possible to make it as open and transparent as possible. I am
attuned to suggestions that can open that transparency and give that confidence
to the community.”

If that is so, Commissioner,
then what happened to the so-called checks and balances in the Gerard case and
some others that I have highlighted in my submission to a parliamentary
? In
another submission to the committee, retired senior prosecution manager Bob Fitton also exposes
some other audit cases that must have bypassed your stringent checks and

There are millions, if not
billions, of dollars being lost to the Australian community because of these
secret settlements, and at present there is no parliamentary scrutiny of
them. Politicians have allowed the ATO
to hijack the settlement agenda and they need to reclaim it quickly. What sort of government would allow a system
like this to keep going?