Helen Petaia started a technology company to deliver immediate access to critical medical information, until the ATO launched an attacked and crushed her business and ability to earn an income and feed her family as a single mum
Background
12 years ago, Helen Petaia started a technology company to deliver immediate access to critical medical information. Using a QR app on the smartphone you can access the emergency summary for thee person being cared for, it was inspired by a medical emergency during the birth of her youngest son when hospital staff couldn’t find vital medical information.
Ms Petaia says “the market response we were getting was very responsive, so I quickly realised that if we were going to grow the business we needed to bring in more capital, so we established a second company in 2010”.
Major sporting codes like the Queensland Rugby League jumped on board, Ms Pataia won government research and development grants. Then In late 2012 the ATO announced an audit of her businesses. A lot of people said, “Give up, it’s not worth it, it’s the tax office, you won’t get anywhere.” Ms Petaia kept fighting because she knew the ATO was wrong.
The Destruction of Helen’s Business
The ATO has destroyed Helen’s business and wiped her finances but through dogged determination she’s managed to expose a comedy of errors, inaction and incompetence.
Ms Petaia’s life was put on hold, and her business was put on hold, all the while you need to fight and prove your innocence.
The ATO notified Ms Petaia they were going to audit both companies, but it was just a research and development audit. It wasn’t a company wide audit. It was fine. We had no concerns and at the conclusion of the audit meeting we almost didn’t give it a second thought. Almost a year went by with little contact from the ATO.
And then in late 2013 there was a bombshell, the ATO issued tax bills for $370,000 and accused Helen Petaia of claiming research and development grants that she wasn’t entitled to. The ATO gave a decision paper that claimed that Ms Petaia had been reckless, she had made false and misleading statements, and that because of that the ATO hit her with additional 50% penalties and fines.
Ms Petaia says it was an attack against her and her character. The ATO were accusing of her of dishonestly, that I’d been fraudulent, I just felt my head was now on the chopping block, so then we endured very aggressive debt recovery actions.
The ATO issued garnishee notices on her bank account. They were financially ravaged, the only choice or option to survive was to go into debt. Her business was in free fall as her investors pulled out. The family lived off credit, there was no money to pay school fees and other expenses for her five children.
Ms Petaia says her children would come home and ask for money to buy things. The money was not there, she was constantly making excuses a little bit or, “Do you really need that now?” Constantly every time there’s bills, mobile phones, I mean every bill, rates. We fell into arrears. The local council took us to court as well for falling into arrears on our rates on our property, I think I just got so used to it that I probably don’t realise how bad it was.
The ATO Admits Fault
In a surprising turn of events, twelve months later there was a stunning development with the ATO finally admitting it had got it wrong. Strap in though, this is no small thing. The ATO appears to never take any responsibility for the damage and loss to taxpayer business.
An Assistant Commissioner for Small Business rang to offer a personal apology:
Darryl Richardson, ATO Assistant Commissioner: It was clear to me that there had been a breakdown in the ATO processes. I apologise firstly for the manner in which it’s been conducted and also the impact that it’s had on you personally and also on your colleagues.
Ms Petaia applied for compensation for the millions of dollars lost however, the ATO offered a disgraceful $20,000. Ms Petaia launched her own forensic investigation to build her case for realistic compensation. She went looking for ways to find out what went on behind the scenes of the tax office.
Through a Freedom of Information request, she found case notes revealing a litany of problems and mistakes. Crucial information had not passed on between case officers. The ATO misplaced important documents she’d given them, yet accused her of withholding this information. The ATO built its case against Helen despite her company not even having been properly audited and assessed.
A Litany of Errors
Ms Petaia found through her own audit process, a case officer was instructed by the case manager to cut and paste the first company’s document and use that as the position paper for the second company. A bogus position paper.
Whilst the ATO organised a mediation to try and reach an agreement on how much compensation it would pay, they fell short of taking responsibility. Based on what the business would’ve been worth, and based on what the opportunity that was stolen from us, and we were poles apart.
The ATO treated me like “I am just this mum in the suburbs, what would I know, how much money is it going to take to shut her up and that’s the attitude I feel comes across from the ATO”.
Ms Petaia filed proceedings against the ATO in the Supreme Court. She says “in order to get fairness is to take the dispute outside the tax office and to have people not involved in the tax office that don’t work for the tax office become the judge of my destiny.”
“We’ve lost our investments, we’ve lost our home, I’ve personally lost my business reputation, the only thing I haven’t lost is my family. Now I’m fighting for fairness, I’m fighting for them, I’m looking to recover what we’ve lost”.
Helen says everybody could have this happen to them with the Tax Office. It came out of nowhere, it was completely unexpected, it’s turned her life upside-down, it’s caused her and her family to have to go in a whole different direction, and the truth is it could happen to anybody.
She wants to pave the way for others caught in the same David and Goliath battle. Somebody eventually has to win against the tax office.
Ms Patais says, “taxpayers need to keep fighting, they can’t keep winning just because they have more money, just because they have more power“.