Report Urges Leniency For Victims In Australian Tax Scams

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

28 September 2001

The Australian Taxation Office (ATO) has been urged by a Senate Committee to be lenient with people caught out by mass marketed tax schemes because it can not justify the ATO's course of action in refusing deductions for over 60,000 investors as the majority of them were innocent victims and unaware of the schemes' fraudulent activities.

This is according to the Senate Economic References Committee which has written a second report into Mass Marketed Schemes and Investor Protection issues entitled: 'A Recommended Resolution and Settlement.' The date of a court case on the schemes and their vicitims is yet to be revealed but in the meantime, said chairman Shayne Murphy, 'too many people have had to place their lives on hold. They are anxious, angry and uncertain. Equally, the ATO is experiencing great difficulty in resolving this matter.'

The Committee decided that investors should be given the opportunity to tackle their debt situations and recommended various allowances to enable them to do so by requesting that the ATO agree to 'full remission of penalties and interest on all scheme debt arising from deductions claimed in 1998/99 and earlier years.'

Senator Murphy has confirmed that the Committee also suggested that 'investors should undertake to repay their primary tax obligations, which in most cases will be significantly reduced by the cash outlays settlement, and agree to lodge no further objections or appeals.'

In response, ATO Commissioner Michael Carmody said he welcomed the report and the office was mulling over the Committee's recommendations. 'I also welcome the Committee's finding that any resolution needs to strike a balance between the fair collection of tax given the circumstances of these people, and the need to deter a similar future raid on the community's revenue system,' said Mr Carmody.

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