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Reforming the ATO

 SEA is committed to seeing substantial reform to the way the ATO treats self-employed, small business people. This requires not just changes inside the ATO but legislative reform to how the ATO uses its powers.

Solutions Under Way
Potential ATO Solutions
Problems with the ATO
Corruption in the ATO?
Related links

Solutions Under Way

Situation as of January 2019

We’re pleased that both the Coalition government and the Labor opposition have announced plans to reform the ATO’s treatment of self-employed small business people. We’ve congratulated Labor but said they need to go further. The Coalition government’s plans implement the reforms we are seeking and go further.


On 29 November 2018, the Prime Minister announced that the government will introduce a Small Business Tax Tribunal independent of the ATO. We totally endorse this policy as it is exactly what is needed to introduce a measure of fairness and justice to the way the ATO treats self-employed, small business people.

The key parts of the policy are:
  1. Tax concierge service through the Small Business Ombudsman.
  2. 10 tax clinics operating in conjunction with Universities providing access to tax practitioners and tax students on a pro bono basis.
  3. A dedicated Small Business Tax Tribunal operating within the AAT. The SBTT will:
  • Be totally separate from ATO.
  • Not involve lawyers.
  • Appoint a case manager to support the taxpayer.
  • Make decisions within 28 days of a hearing.
  • Require a payment of $500 from the taxpayer for each appeal.
  • If the ATO appeals the AAT decisions to the Federal Court, the ATO will pay the small businesses’ reasonable costs.
  • If there are test cases where lawyers are used, the ATO pays for the taxpayers’ lawyers.
Our commentary is here.


The Shorten Labor opposition announced its policy on 31 August 2018. Its statement is here and states that it will

“…legislate to establish a new position of Second Commissioner – Appeals within the Tax Office, reporting to the Commissioner of Taxation, to head up a new Appeals area within the Australian Taxation Office.”
We have said that this is an excellent step in the right direction, as it recognises the bad treatment of self-employed by the ATO, but it needs to go further. Appeals/review must be handled externally to the ATO. Our full commentary is here.

Potential ATO Solutions

SEA Position Paper: The Power to Audit is the Power to Destroy

Small Business Tax Tribunal: Campaign 2017

We launch campaign for Tax Tribunal (5 February 2017)

A low cost, non-adversarial, independent, tax dispute-resolution procedure for small business people. The proposal below is modelled on the current Immigration Tribunal.
  • Tribunal independent from the ATO, made up of tax and legal specialists.
  • Tribunal determination would be required before a matter could go to the courts (AAT or Federal).
  • A small business applicant would pay a modest fee (say, $1,600) for a hearing.
  • Lawyers could not represent either the ATO or the small businessperson in any hearings.
  • The Tribunal would review the ATO’s allegations against the small businessperson with a view to a correct application of tax law.
  • The small businessperson could present his or her case.
  • The Tribunal would make a decision binding on the ATO.
  • If the Tribunal made a decision in favour of the small businessperson, the person would receive a rebate of (say, $800) on their lodgement fee.
  • If the Tribunal made a decision against the small businessperson the person would retain the right to appeal to a court.

The Inspector-General of Taxation is an office that could probably have its powers extended to include those of a Small Business Tax Tribunal.

Understanding the ATO's Powers

The ATO can:
  • Raid your home without a warrant.
  • Allege a debt without proper evidence.
  • Demand payment of an alleged debt.
  • Forcibly take (garnishee) money from your bank account.
  • Sell your house.
  • Bankrupt you.
All this before you have a chance to defend yourself.

Seven key ATO powers. Details here for Self-Employed Australia members. Join here.

We oppose expansion of ATO power (16 August 2018)

SEA Submissions

Submission to Treasury on Australian Business Numbers [November 2018]

Submission to Treasury on Director Identification Numbers [October 2018]

Submission to House Tax and Revenue Committee [October 2018]

Reforming the ATO: The Power to Audit is the Power to Destroy [April 2018]

Submission to the Draft Treasury Laws Amendment (Tax 3 Transparency) Bill 2018: Transparency of taxation debts 9 February 2018

ICA Submission to Parliamentary Tax Office Review of ATO Scrutiny [March 2016]

ICA Submission to Inspector-General of Taxation
[December 2015]

ICA Submission to Board of Taxation Review

Problems with the ATO

We give evidence to Senate hearing (June 2018)

ATO unfair says ATO report (2 August 2018)

Official reports say ATO abuses self-employed (July 2018)

ATO responds to Four Corners (June 2018)

Four CornersMongrel Bunch of Bastards’ (9 April 2018)

ABC Four Corners program blows the lid on the ATO’s mistreatment of self-employed, small business people.
This historic and crucial report must be a trigger for ATO reform.

  • Exposing the truth.
  • Media coverage.

  • ATO illegally withdraws ABNs

    In late 2017 the ATO suddenly withdrew the ABNs of 16 work-from-home, low-income, self-employed people. This immediately destroyed their incomes. It took almost 13 weeks of hard pressure before the ATO backed down.

    Here’s the full story.

    The Rod Douglass  Case

    Rod was accused by the ATO of tax evasion because he followed ATO advice on the ATO website. We took Rod's case to court where the ATO dropped its allegation. Here’s Rod's story.


    The Michael Shord Case

    Corruption in the ATO?

    September 2018: we release our major research project "ATO Rules For The Rich".  We call for a high level investigation into whether the ATO suffers from internal corruption.

    Summary is here.
    Full report is here
    Losses calculation is here (SEA member access)
    Source references are here (SEA member access)

    Huge Tax Scam: The Cranston Affair

    The largest tax fraud ever hit the headlines in May 2017. The ATO’s top fraud officer is sacked. The unfolding of the story is as follows:

    Related Links

    Big review of ATO (June 2017)

    ICA Submission to Parliamentary Tax Office Review of ATO Scrutiny (March 2016)

    Inspector General of Taxation; Review into the ATO's Employer Obligations Audits: ICA submission (Dec 2015)

    Official report slams ATO discrimination against small business people (March 2015) 

    Board of Taxation Review of Australian Tax Office treatment of small business people (February 2015)

    ATO's discrimination against independent contractors to stop (January 2015)  

    Questions to the Tax Commissioner and his reply (September 2014)

    Government major ATO Review-ICA submission (May 2014)

    Tax Office doesn't 'get it' (December 2012)

    ATO fails to apply PSI laws: Case Study (July 2012)

    Can Canada increase entrepreneurship?
    (January 2011)

    Bill Shorten says 'no change' to PSI (October 2010)

    Statement from Abbott opposition on PSI (June 2010)

    Tax Burden: UK versus Australia (June 2010)

    Important Federal Court decision: ATO, PSI, Results test for companies and trusts (December 2007)


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