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The ATO’s coming to get you! You’re a Covid-19 fraudster they say

Monday, June 29, 2020

We can’t believe that, for all the great work the ATO has done with implementing the Covid-19 support packages, it's decided to blow up that good work.

Last week (23 June) the ATO released a statement ‘ATO zeroes in on COVID-19 fraud’. The ATO has declared that it reckons lots of Australians are committing fraud in applying for Covid-19 support (JobKeeper, Cash Flow Boost, early release of super, etc.) But look at what they are targeting.

They are chasing people the ATO says are:
  • Manipulating turnover tests.
  • Inflating reported withholding amounts.
  • And so on.
The problem is that each area the ATO is targeting is open to wide discretionary interpretation by the ATO. And if the ATO reckons you’re a fraudster, that’s it! Your access to independent appeal is essentially non-existent.

Look at this example:
The government says you can apply for early release of superannuation.
But the ATO now says that if you take out money and also contribute to superannuation, that you’re a tax dodger and they’ll fine you. However, the government’s announcement and legislation on early super release doesn’t say that you can’t withdraw and contribute. The ATO says you’ll have breached the ‘anti-avoidance’ rules which are obscure and impossible to understand.
This is effectively the ATO making law on the run, using its discretionary interpretation powers. The consequence is that no-one can trust what the government says. The government gives and then the ATO takes it away and calls you a fraudster.

And look at this:
The ATO granted JobKeeper to a business with 21 employees. The business’s turnover had dropped 47% in March. But the ATO has done an audit and taken JobKeeper away, saying that the business’s turnover has not dropped more than 30% in April. This ATO action is totally against the law which says that once your turnover has dropped the required amount in one month, you don’t have to re-qualify in other months. We have seen the ATO audit. It’s an outrage.
We gave evidence last Friday to the Parliamentary Committee that oversees the ATO. We explained that the there is a great sickness in the ATO’s audit and enforcement division. We described the situations above. Here’s what we said. And you can listen to our evidence here.

The problem is that there are no independent oversight or appeals processes against ATO audits. And the evidence is overwhelming that the ATO abuses its powers as well as doing bad quality audits. This ATO behaviour trashes trust in the government’s Covid-19 support packages. The harm is immense.

And more. So many thousands of ATO officers have done a stunning job during Covid-19. Yet the out-of-control ATO audit and enforcement division smashes that great work, trashing the ATO’s reputation in the process!!! So wrong!

This situation has got to be fixed.
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