ATO Stands Accused Of Breaching Citizenship Rights

by Mary Swire, Tax-News.com, Hong Kong

06 January 2003

Reports in the Australian media revealed last week that the Commonwealth Ombudsman has challenged the Australian Taxation Office (ATO) over its treatment of investors in mass-marketed tax avoidance schemes.

The plans, which were popular in the early 1990s, earned investors large tax deductions for small investments in areas such as farming, forestry, and film production. However, when the ATO disallowed the deductions provided by the schemes, it also forced many investors to sign away their rights under the Freedom of Information Act in return for slightly more favourable tax settlement conditions.

Reporting to Parliament last week, Ombudsman Ron McLeod launched a scathing attack on the tax authority, arguing that: 'Access to information under the FOI legislation is an important right of our citizenship'.

According to a report in The Australian newspaper on Friday, thousands of affected investors have now applied for access to the details of their cases in order to ascertain whether the tax office complied with its obligation to review each case individually. However, according to Mr McLeod, the ATO had also been unacceptably slow in informing investors of a September 2001 decision to process all FOI requests for a flat fee of $200, quoting up to $100,000 for the information in some cases.

'The ATO's processing of these applications appears to have gone well beyond the statutory time limits and otherwise would appear to indicate a number of instances of defective administration,' Mr McLeod's report concluded.

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