ATO criticised over tax schemes

taxation australian taxation office ATO

2 November 2001
| By George Liondis |

The Commonwealth Ombudsmen has released a report calling on the Australian Taxation Office (ATO) to supply more information to investors caught up in mass marketed tax minimisation schemes.

Releasing the body’s annual report today, Ombudsman Rod McLeod claimed the ATO had refused to supply more information to investors on why decisions to allow or disallow claims related to tax minimisation schemes had been made, despite a specific request from the ombudsman’s office to do so.

“I believe the ATO could do more to negotiate a satisfactory position with these complainants, in the interests of the individual complainants and tax administration more generally,” he says.

A Senate report released in late September was also critical of the ATO’s handling of mass marketed schemes, concluding that there were problems with the ATO’s treatment of individual taxpayers who invested in the schemes.

The Senate report also pointed to concerns about the ATO’s response to the rise of a large scale market for the schemes before it acted to disallow tax deductions from the schemes.

The tax commissioner, Michael Carmody, has been roundly criticised in the past for taking up to four years to disallow some of the schemes.

The schemes, some of which had in fact been around for more than 10 years before the tax office made an adverse ruling against them, are believed to involve over 60,000 people, many of whom have now been left with tax bills and penalties running into the tens of thousands of dollars.

The tax office currently has 115 scheme promoters or advisers under investigation in relation to agribusiness, franchise and research tax minimisation schemes, and others under investigation in relation to film, book, investment and live theatre schemes.

The schemes, which became prolific in the latter half of the 1990’s, have cost the tax office $1.4 billion in uncollected taxes, according to ATO assessments.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 3 weeks ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 3 weeks ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 3 weeks ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

1 week 1 day ago

Having divested its advice business in August, AMP is undergoing restructuring in at least four other departments amid a cost simplification program....

4 weeks 1 day ago

The Reserve Bank of Australia's latest interest rate announcement has left punters disheartened on Melbourne Cup Day....

1 week ago