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The ATO wants less scrutiny. Are they joking?

Thursday, March 10, 2016

The Australian Tax Commissioner has been complaining to the Treasurer that the ATO is subject to too much scrutiny. At first, we at ICA thought this was a joke! But no, a parliamentary committee is reviewing whether the ATO needs less scrutiny.

We’re staggered and so we’re responding. We’ve put in a submission saying that, in relation to treatment of small business people, the ATO needs more scrutiny, not less. It’s a long submission but it needs to be.

Here’s a summary of what we say:
The ATO requires more robust scrutiny than is currently the case in relation to its handling of small business people. This is required because the ATO consistently demonstrates that, in its dealings with small business people, it cannot be trusted to act fairly and with due and proper process. In some case, arguably, it appears that it cannot be trusted to act within the law.

Small business people are in a highly vulnerable position when the ATO makes accusations against them. The ATO has huge resources to prosecute its case whereas small business people lack the resources (financial, informational and legal) to defend themselves. It is often the case that the ATO prevails because small business people cannot defend themselves. The result is injustice. Because of the huge inequality in bargaining power, independent oversight and scrutiny of the ATO is required to ensure that a measure of justice prevails.
Our submission draws heavily on case studies of individual self-employed people who have been subject to what we believe is oppressive, unfair, unjust and possibly illegal treatment by the ATO.

Specifically, ICA is calling for:
  • Increased powers and resources for the Inspector-General of Taxation to oversee the processes of the ATO.
  • The creation of a Small Business Tax Tribunal that has oversight of the ATO’s interpretation of the legal facts and its application of tax law to self-employed small business people.
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