A recent Channel 9 story alleging that the ATO is “killing a small business” has ruffled feathers at the tax office, which has issued a statement defending its judgements and processes.
The A Current Affair story featured former ACCC chair Allan Fels stating that: “The ATO is very vulnerable to stuff-ups, above all cos there is no adequate oversight or supervisory mechanism”.
“The prosecutor shouldn’t be the judge, nor the investigator,” he said.
Mr Fels’ comments were in the context of three business owners airing their gripes about ATO procedures – the latest in a string of allegations of mishandling, bullying and unbridled power abuse by the agency.
“They falsely tried to claim $148,000 from me,” one now-retired business owner claimed.
Another – a small suburban pizza store – claimed the ATO hit them with a post-audit tax bill in excess of $2 million, despite earning profits of just over $214,200 for a 30-month period.
“I just want to know where they’ve plugged these figures from … Essentially, an unrealistic assessment is now killing a small business,” the business owner said.
Both were told their only option to dispute the findings was to go through a costly and time-consuming tribunal complaint process.
While one was ultimately successful after “many years”, the other said they cannot afford to go through the tribunal and will likely be forced to shut up shop.
A third alleged victim of the ATO, a sole operator, claimed that her ABN was cancelled by the ATO without warning, and that the ATO has failed to explain its decision – pushing her onto unemployment benefits.
However, the ATO took the rare step of issuing a statement to stand by its determinations.
“Due to privacy obligations it is highly irregular for the ATO to make public comment about the tax affairs of individual taxpayers. However, we will take steps to correct the record to ensure that public confidence in our administration of the tax and super systems is not undermined,” it said.
“Contrary to claims from the individuals involved, we have looked into the case that has been put to us by A Current Affair and we absolutely stand by the actions we have undertaken.”
The ATO said its actions are dependent on businesses communicating directly with it and responding to various notices of demand.
“Where taxpayers fail to respond to a position paper put to them based on this evidence, and where we have attempted to engage with them for an extended period, including providing them with every chance to rectify their tax situation and pay the amounts due under the law, we take firmer action,” it said.
“It’s important to note that in general we do not proceed with a garnishee action if there is a current dispute.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.