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Criminal justice vs Tax Justice. Are the two the same?

Tuesday, December 11, 2018

In what would seem a rather startling revelation in The Australian yesterday, Robert Gottliebsen comments that, pending an explanation, in his view

“…as it now stands, there is one law for the alleged criminals and another for law-abiding, taxpaying people.”
He asks how this is possible and says:
“One explanation is that the ATO is completely above the law and not subject to any laws that elected politicians may choose to pass.”

The issue is to do with whether evidence provided to police by a person’s lawyer can be used against that person to prosecute them. Information between a lawyer and his or her client is privileged and cannot be used against the client.

The issue has blown up because in a Victorian criminal case involving prosecution of alleged gangland criminals, police used information supplied to them by the alleged criminals’ lawyer to undertake prosecution.  The case has shocked the legal community—at least following the release of a High Court ruling damning the police.

The High Court said:
“…Victoria Police were guilty of reprehensible conduct in knowingly encouraging EF to do as she did and were involved in sanctioning atrocious breaches of the sworn duty of every police officer to discharge all duties imposed on them faithfully and according to law without favour or affection, malice or ill-will. As a result, the prosecution of each Convicted Person was corrupted in a manner which debased fundamental premises of the criminal justice system.”
AB (a pseudonym) v CD (a pseudonym); EF (a pseudonym) v CD (a pseudonym) [2018] HCA 58 (5 November 2018)

The contrasting tax case is where a taxpayer’s lawyer provided privileged information to the ATO that was used against the taxpayer. The Full Bench of the Federal Court ruled for the ATO saying:
Where the Commissioner is provided with a taxpayer’s privileged documents and uses them in the process of assessing the taxpayer’s assessable income in a given income year, this will not involve conscious maladministration... The common law of privilege has nothing to say in such a circumstance and any claim for a breach of confidence involved in the process of assessment cannot withstand the operation of s 166.”
Commissioner of Taxation v Donoghue [2015] FCAFC 183 (17 December 2015)
The High Court said
“There is no reason to doubt the correctness of the decision of the Full Court of the Federal Court of Australia.”
[2016] HCASL 131
We strongly support the decision of the government to establish a Small Business Tax Tribunal. More reform of the ATO is required to ensure fairness and justice, particularly for vulnerable self-employed, small business people in dispute with the ATO. Our reform agenda is here.

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