Business owners who have adversely suffered from unfair treatment by the ATO have been called on to urgently come forward as part of a formal investigation, as more allegations continue to surface.
Earlier this month, bullying claims of the ATO’s internal culture and treatment of SME audits alleged the ATO was deliberately abusing its size and power to trample vulnerable businesses and taxpayers as part of a targeted cash grab.
The Tax Office claimed that the bullying claims raised in the media were isolated examples only, and not part of a widespread revenue-grabbing policy.
However, My Business has since been contacted by several business owners and individuals who have also been strong-armed by the ATO.
“I was hit by an unscrupulous ATO investigator who gave me an assessment and then proceeded to instruct me that an appeal would be ‘fruitless’. He told me to submit the appeal through him, and of course, he dismissed it,” one My Business reader recalled.
“It was such an unfair situation that I went to the local member and got him involved. It turned out that the "appeal" had never been submitted by the investigator. He had got a bee in his bonnet to crush me!
“Some 12 months later, after some assistance from my local member, the debt was dropped by over 90 per cent, including the penalty reduced to zero. But by that time, it had cost me emotionally, professionally and distracted me from my business. My business was ultimately put into liquidation.”
Meanwhile, the wife of an interstate truck driver told My Business that her husband was hit with a $90,000 tax bill after the ATO took exception to his employer’s EBA.
“His group certificate stated he was paid an overnight allowance every financial year hence it was claimed as per ATO guidelines,” the woman, who wished to remain anonymous, said.
“We were audited and as the ATO didn’t like the way the EBA was written, we had to repay over $90,000, which was tax returns paid over several years and a massive amount of interest. This left us in severe debt and in financial ruin.”
The woman claimed that the ATO then audited all of the roughly 200 drivers employed by the company because of the EBA. After two years of trying to fight the verdict, nothing has changed and the ATO has since “lost” all of the provided documentation, she said.
With so much confusion and angst about the ATO now in the public domain, the Australian Small Business and Family Enterprise Ombudsman (ASBFEO), Kate Carnell, called on SMEs involved in disputes with the Tax Office to urgently come forward.
“Minister for Revenue and Financial Services, Kelly O’Dwyer, has requested an inquiry into the allegations raised in the joint Fairfax/Four Corners investigation,” Ms Carnell said.
“Under the direction of Treasury, my office and the Inspector-General of Taxation, Ali Noroozi, will examine cases of unfair conduct and bullying by the ATO.
“Our timeframes on this bullying inquiry are extremely tight, so its important small business owners tell us their story as a matter of urgency – within the next week or two.”
Ms Carnell said that with 3.8 million small business taxpayers, including sole traders, and the inspector-general admitting that the ATO makes incorrect judgements in around 5 per cent of cases, there are “way too many” instances of businesses being wrongfully sent to the wall.
“We want to gain a better understanding of how the ATO is adversely interacting with small businesses so we can provide the government with constructive and realistic advice,” she said.
“My office is interested in examples where the ATO has resorted to bullying and targeted small businesses unfairly and the business owner has been affected financially.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.
Ask the Experts: Does automation stack up financially?
By Christopher Overton
Opinion: How bad do things have to get?!
By Adam Zuchetti
Business lessons from the All Blacks
By Steve Stanley