Jul 19, 2013

What are your rights with the taxman? Call to clean up ATO ‘disgrace’

Another disgruntled taxpayer is suing the ATO for $5.1 million in damages, as taxation experts call for stronger compensation rights and a taxpayers' charter to be enshrined in law.

Chris Seage — Tax consultant and former ATO audit manager

Chris Seage

Tax consultant and former ATO audit manager

A disgruntled taxpayer who lost his wealth, health and marriage after a five-year tax audit has lodged a statement of claim in the Federal Court seeking $5.1 million in damages, alleging the commissioner of taxation acted negligently and in breach of his statutory duties. Another taxpayer who fought the Australian Taxation Office for a decade and won six times through the courts but is out of pocket nearly $1 million is considering personal action against the agency, amid calls by leading tax academics that compensation rights and the taxpayers’ charter should be enshrined in law.


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28 thoughts on “What are your rights with the taxman? Call to clean up ATO ‘disgrace’

  1. mattsui

    Yeah, I really should take your lead and wait for three days before I comment on a “news” item.
    My comments at the time were based on all the facts in the story (which the author has since admitted were poorly presented).
    The bigger picture here is tax reform. Broken systems creating (aparently innocent) victims.

  2. Shaniq'ua Shardonn'ay

    @Chris Seage – yep I’m sure Vanuatu is more ‘competitive’. Ron can go and live there if he wants – send his kids to school there, use their healthcare system and drive about on their roads if he wants to. Electricity and Water is probably cheaper and I’m sure they have great broadband infrastructure. He can support the indigenous community there – I’m sure they need it. Funny he chooses not to.
    @Andbega and others – as I said just because it’s legal doesn’t mean it’s morally right.

  3. ArcherCCH

    @mattsui – you showed your naivety in your original post about how the tax system works and how the commercial world works. Even the Commissioner of Taxation acknowledges there are very good and sound reasons why Australians invest overseas. I did not see any admission by the author that he presented the case poorly because he wrote the taxpayer won 6 times in court including over 2 overzealous DPO’s where the judge warned the ATO.

    @Shaniq’ua Shardonn’ay – I can see the commie coming out in you. Don’t like free enterprise?

  4. ArcherCCH

    The important point of this whole story is that Australia has fallen behind the rest of the developed world with taxpayer rights and accordingly our tax system is not functioning at full throttle.

    In the US there is Taxpayer Bill of Rights legislation which includes taxpayer rights to compensation and a strong Office of the Taxpayer Advocate. Claims by taxpayer for compensation for breaches by the IRS of Constitutional rights are also common. There is presently a push for further legislative change to further strengthen taxpayer rights. In countries like the UK there is a judicial recognition of substantive rights to fair treatment by tax officials and an incorporation into UK law a number of principles of European Law which stand to further enhance British taxpayer rights. In Canada there has recently been a spate of taxpayer negligence claims against the CRA with judges being much more receptive of taxpayer claims.

  5. Elliot Blue

    Elsewhere: “The Treasury has admitted it is virtually powerless to stop multinational companies such as Apple and Google dodging tax, saying Australia must focus its efforts on an international crackdown led by the G20 and the OECD.”

    Australia needs a Bill of Rights. Bob Carr tells us we don’t need one because parliament protects our rights for us, but we consistently see politicians only look after themselves and their party. Politicians might pretend not to like the ATO, but it pays for their over the top perks and election war chests.

  6. Brian Donaldson

    As someone in the process losing my house and all I own to the ATO because of one auditor’s reckless audit I can assure readers that honest taxpayers have no rights at all, for the dishonest its simply put your house and possessions in some one else’s name end of story. But if like me and against solicitors instructions you take the moral high ground and put it all on the line because you no you are right, there is no justice at all no day in court and no satisfaction from the commonwealth or taxation ombudsman and to tidy it all up when they bankrupt you they then say they cant talk to you have no rights. Though homeless and in poverty the dedication I have shown to my business these last 23 years will turned to over throwing this dictatorship

  7. lespauljunior

    Shaniqu’a: Ron Pattenden lives in New Zealand, not Vanuatu. His scheme was to give burial dignity to the Aboriginal population; but the restrictive laws made it impossible to base the business in Australia. I have had frank talks with the Deputy Inspector of Taxation: he states that he “would not” set up a company in Australia because of the restrictive bureaucracy and the practices of the ATO. The ATO do not obey “The Rule of Law” (although they are meant to be “Model Litigants”) and can falsify your case to demand money from you. Until you have been through it, and have had money, or your house stolen, it is impossible to reduce in words the degree of corruption and suffering it causes.

  8. lespauljunior

    The matter of private legal firms being hired by the ATO is another facet that must be exposed. For example, Minter Ellison have a two year standing order to supply the ATO with $3.8m of “legal services.” If you were a private company looking towards Minter Ellison, (or other private law firms on government retainers), you would need to think hard about using their services. If they falsify facts, or act with gross negligence in your case, would it be because they want to please the ATO?

    In my case, they were paid $127,000 from public funds (from the $100m+ per annum that the ATO spends on “legal services”) on the entire basis of an eleven word contract:
    “To assist and advise in the resolution of the claim generally.” I got thiscontract info under FOI.

    Nice work if you can get it! Compensation paid to the innocent: $0.

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