H vrs the ATO

I’m writing this just because I want to record it, but I don’t really like saying anything about it. That seems true of a lot of stuff lately.

I had a meeting at the Administrative Appeals Tribunal on Friday with an adjudicator, and the Australian Tax Office.

Without wanting to go into the long, drawn-out rigmarole leading to this, the basic gist is that several years ago I incurred a tax liability which I was later unable to pay because of unfortunate and unforeseen circumstances. After some discussions with the ATO last year I was advised by one of their representatives that I could appeal to have the debt reduced or waived on grounds of hardship. I put in an application and was ultimately rejected on the grounds that my hardship was too severe – basically meaning I was so fucked that waiving the debt wouldn’t unfuck me. It seemed a strange perspective.

I appealed again, and after several months waiting for a response was finally advised that this appeal had failed – because I wasn’t fucked enough. About this time I felt like Goldilocks visiting the three bears. I’d tasted the porridge that was too hot, had found the porridge too cold, and was wondering if ‘just right’ actually existed. In any case I went back to them expressing my exasperation. That’s what led to our meeting on Friday.

Have to say I didn’t go with the greatest of expectations. The ATO is not commonly perceived as a family friendly organisation. It’s hard to argue with the tax department and win. The events of Friday seemed to bear that out. The ATO’s position can be pretty well described as ‘it’s our way or the highway’.

For the most part the meeting was civil. The adjudicator was a friendly, reasonable man, obviously expert in these matters. The representative from the ATO was more uptight, though pleasant enough. I wasn’t sure how it was supposed to proceed, but basically I had to explain to them why my hardship was of sufficient severity to warrant an exemption. Given the sate of my affairs that seemed a lay down misere, but of course I was mistaken thinking that.

They tell me that the legislation in matters like this is pretty clear. The adjudicator was sympathetic to my situation, and apologetic – his hands were tied. I became frustrated, and began asking questions to which I received no clear answer. I was reminded repeatedly that the ATO is not a commercial organisation – which means, basically, they’re not interested in coming to commercial arrangements even when it’s in their interest. They’re like a robot that processes information without discernment, pumping out judgements based on rigid parameters. Even so, there appear grey areas.

I went away from the meeting with their recommendation that I should come to an arrangement with the ATO. Take note that an arrangement is not a deal. I was asked if we could deal and was told that for the ATO it’s all or nothing. An arrangement is something by which I agree to pay the full 100% in agreed instalments. Otherwise, as I was told, they’ll take the money, or make me bankrupt. They’re a black and white organisation.

That night I wondered what advantage there is in coming to an arrangement. None without incentive. Had they offered me a discount of say 30% I’d have agreed to it, notwithstanding the fact I barely have two shekels to rub together. In the absence of such an offer though why would I agree? Surely it’s in my interest to drag the process out, to extend my freedom from this for another 12 months or more? Especially when there is the chance that an independent tribunal might find in my favour.

This is the utter stupidity of the intractable philosophy of the ATO. This has already cost $3,000 in accounting fees, and much more in man hours, not to mention the cost of meeting on Friday. What will another 12 months of this cost? Isn’t it better just to get the deal done? You would think so, but that ignores the political, punitive and bureaucratic nature of this decision. We know they’re not a commercial organisation, so spending $50K to get $30K doesn’t factor. More to the point I believe, they can’t be seen as doing deals or being ‘soft’. It’s the outcome that matters, not the process, and certainly not the individual.

I was angry the following day, and defiant. As an Australian citizen I deplore such wastage. Coming from a commercial background deals are done every day to get things moving. So the government isn’t commercial, but perhaps it would do well to have a more commercial – and efficient – perspective. I was greatly troubled also by the indifference they have towards their own citzens. I was told stories of how they had effectively ruined people to get their pound of flesh. By my reckoning the ATO, as part of the government, should be serving the people. I may be in dispute about tax now, but I’ve been a taxpayer for 30 years. By my reckoning that makes me a shareholder. I don’t think shareholders should be treated that way; more to the point, the Australian government should not be in the business of making paupers of its citizens. (Of course this is a high falutin’ ideal. Looking how the likes of Julian Assange is treated makes it clear the government has little regard for the rights of its citizens when it doesn’t suit them.)

In any case I came up with several objections that I will take further:

  • At what point is hardship determined? Where is the line drawn in the sand? This is a question I asked, and they couldn’t give me an answer. It appears to me that they shift the goalposts to a place that suits them.
  • The refusal to deal seems a convention rather than anything enshrined in legislation. They may not ‘do deals’, but there’s no legal reason that they can’t.
  • Is it legal for them – bearing in mind they have a provision for hardship – that in executing their claims they put the appellant into a position of hardship? (They threatened to take the proceeds of my shop if I sell it. I asked them: “if I sell the business for $20K and you take it, could I then claim and be granted hardship?” They didn’t know. Hmm, probably. This too makes a mockery of the process.)
  • Finally – and this is a value judgement about the rights of citizenship – is it right for the Australian government in executing its legislation to put her citizens in peril? My argument on Friday was that I want to be a taxpayer for the next 15-20 years, and go for your life. My ability to be that is severely crippled if the ATO take from me the means to generate income, make for myself a life, and ultimately pay tax.

I’m seeing a legal aid lawyer, and consulting with a specialist tax lawyer pro bono. I’m due to meet with these same dudes in a months time.

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