The Australian Constitution guarantees protection against acquisition of property on unjust terms (Section 51 (xxxi)). This basic right has been systematically abused by the ATO to disempower taxpayers and loot the savings ordinary Australians.
Director Penalty Notice
A Director Penalty Notice (DPN) is a legal document issued by the ATO to a director of a company. The purpose of the director penalty notice is to inform the director/s that they are now personally liable for the tax debts of the company.
Directors may face legal action if they prioritise other payments over tax debts [legitimate debts]. This often happens when directors fail to comply with tax lodgement and payment obligations—BASs and IASs are not submitted on time, and tax debts are frequently left unpaid. A DPN could be issued under Superannuation Guarantee laws if an employer is not able to meet their superannuation obligations by the due date for payment they are required to lodge a “Superannuation guarantee charge statement – quarterly (NAT9599)” with the ATO.
It is concerning that the ATO as alleged, are issuing false DPN’s to taxpayers leading to Statutory Demands and insolvencies.
When a DPN is not properly issued, either by a litany of errors or by fraud on behalf of the ATO officer, it can result in considerable losses and damages for the director. This situation may cause a series of unfortunate consequences, potentially impacting the financial and professional standing of the director and the company not being able to continue to trade, resulting in bankruptcy. These are the complaints made by ATO victims.
Aged Debts
According to reports, the ATO has raised hundreds of debts over many years that taxpayers cannot contest due to the passage of time. The ATO has deemed these cases as non-pursuit, yet retains the right to recover the debts.
False Assessments
A frequent issue reported by taxpayers seeking refunds, such as for R&D or GST, is that the ATO often denies these refunds, citing a false debt. As a result, taxpayers do not receive the refunds they are rightfully owed.
One taxpayer faced fabricated tax debts totalling $250 million against their company. Similarly, an R&D company was hit with $7 million in false penalties, and another business faced $13 million, erasing due refunds and allowing the ATO to take steps to liquidate these companies.
Garnishee Notices
A garnishee notice is a notice issued by the ATO to a third-party of a tax debtor, directing any monies held on behalf of the tax debtor be transferred to them.
ATO garnishee notices can very often be embarrassing to the taxpayer and can sometimes damage the business as it can force third parties into the business’s financial issues.
This garnishee notice may also cause significant cashflow issues for the business.
The ATO can send a garnishee notice to a number of different third parties. For individual tax debtors, the ATO can possibly send a garnishee notice to:
- A person who owes the tax debtor money from the sale of real property.
- The tax debtor’s employer or head contractor.
- The tax debtor’s financial institutions including banks and building societies.
For business tax debtor’s, the ATO can possibly send a garnishee notice to:
- The tax debtor’s business financial institution, bank, or building society.
- The tax debtor’s business suppliers of merchant card facilities.
- The tax debtor’s business trade debtors.
The garnishee notice is a tool used by the ATO to recover tax debts from a tax debtor.
Taxation Administration Act 1953 (Cth)
The authority is given to the ATO by section 260-5 of schedule 1 of the TAA. Section 260-5(1) says:
(1) This Subdivision applies if any of the following amounts (the debt) is payable to the Commonwealth by an entity (the debtor) (whether or not the debt has become due and payable):
(a) an amount of a * tax-related liability;
(b) a judgment debt for a * tax-related liability;
(c) costs for such a judgment debt.
Under taxation law, the ATO can initiate winding-up proceedings and issue bankruptcy notices against companies and their directors by filing a Statutory Demand in court, without having to fully substantiate the debt. This power can be misused, allowing the ATO to target innocent and vulnerable taxpayers.
Royal Commission
Australians are calling for an urgent Royal Commission into the practices of the ATO and CDPP. Robot Debt 2.0.