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\'A mongrel bunch of bastards\': The small businesses being crushed by the tax office

by:J&D WATER     2019-08-21
When dealing with ATO, I never met such a jerk in my life.Mark Freeman\'s troubles with the Australian revenue agency began in the middle2011 after an audit of the black water treatment system, he established a company to develop the technology to convert waste into reusable water.The company has received research and development funding from the government\'s innovation department, is working with the new state university and has won a third place --Support from the Australian Bureau of StandardsBut ATO did not believe the company was eligible for grants and tax compensation and submitted a $250,000 tax bill to Freeman.
\"It\'s like a horror story,\" he said.
xa0Sydney Morning Herald/Four Cornersxa0Investigation into ATO“I was stunned.\"We didn\'t even generate that income to pay off this audit debt,\" he said .\".\"However, after a more careful review of the assessment, the [tax] auditor clearly missed important paperwork.
The battle cost 62.
year-Old Man and finance.
He claims that he has suffered \"malevolent acts of management defects, predetermined results, falsification of debts, denial of procedural justice and targeted conduct \".He said he was bullied, misled, and his reputation and credit rating were destroyed.When he accepted the ATO, he did not know that it would consume his life for the past seven years.
His office is in the house he rented on the southern coast of New State, Ulladulla.He collected a large number of documents and a box of elaborate paperwork to help him clarify his name. He estimated that the battle cost him $750,000.
The battle also affected Freeman\'s personal life.\"Having to deal with institutions of ATO size, using the resources they have, has passed the stage of explaining how difficult we are.It\'s hard for my wife.It is very difficult for this family.We did nothing wrong and did nothing wrong.
Freeman established Blackwater in 2006 and inherited a small legacy and his savings.It comes from his passion to save the ocean.\"From the background of surfing, I have a natural objection to Ocean Falls,\" he said .
\".
\"Having learned the facts of the ocean outfall, I realized that our biggest objection was to develop alternative reuse for wastewater.And he did.The purpose of this treatment system, which looks like a portable box, is to have it installed in each Australian household to recycle waste into reusable water.The Ulladulla sewage treatment plant has set up a prototype, but Freeman\'s struggle with the tax office has been delayed for several years due to lack of funding.
\"This is the first one.
Design reusable site systems for the domestic market.The prototype itself is expected to develop new guidelines for reuse, national guidelines.We have narrowed down a centralized sewage treatment plant to this prototype.
Freeman is one of a number of legitimate companies eligible for R & D funding shattered by the tax bureau.Lawyer Graeme Halperin, who has been in tax law for 30 years, said he told his clients not to apply for funding for research and development.\"This is actually putting the goal on your back,\" he said .
\".
\"I will basically tell customers not to bother with R & D in this country, although the government has talked about its commitment to R & D in this country.He thinks the ATO is getting worse.\"They have a much tougher stance on punishment,\" he said .\".\"If you may initially be fined 5 or 10 cents, and then, due to lack of reasonable care, the fine rises to 25 cents, usually on these days, I will see penalties of 50, 75, 90, and the basic tax bill actually doubled.
Deborah Jenkins, deputy commissioner for small business at ATO, declined negative comments and said there was no image problem with the tax office.\"I don\'t think there is an image problem with ATO...People are very, very active talking to me about the work they do with ATO.
I work closely with some small businesses in the community, industry associations, who are very positive about changes within ATO.I think they all acknowledge that we will make mistakes, but our logo will be how we deal with them and how we can learn from them.Unionxa0Sydney Morning Herald/Four Cornersxa0The investigation found a series of suspicious business practices in ATO, including abuse of power, bullying, intimidation and mistakes.
It spoke to many small businesses and individuals, but most did not want to speak publicly because of fear of retaliation.Even if they were on the right, there was some turning over.The investigation found that the tax office did not always act fairly, which violated the trust of the community.
Freeman is the living evidence.
He said the ATO violated trust in his handling.Since Chris Jordan joined ATO as commissioner in 2013, the organization has been making changes, but with 20,000 employees, the message is hard to convey.Jordan recently addressed the National Tax Agency conference in Cairns, setting out his mission to build trust and confidence in ATO.
\"I do understand the need to be balanced, pragmatic, and he said:\" Respect and empathize with taxpayers and their delegates while being able to maintain the highest position of national interest in this position as tax commissioner .\".But trust is being broken, and as Alan Firth, former head of competition regulators at the Australian Competition and Consumer Council, warned, \"This is an era in which institutions must be trusted \".After its star deputy commissioner, Michael Cranston, ATO was hesitant about trust, and last year, when he was accused of abuse of power, he dragged the office into the scandal, police have previously investigated the $0.
144 billion scam led by Cranston\'s son, Adam Cranston.Michael Cranston, who resigned after the scandal, was accused of improper access to ATO confidential information on behalf of his son.The incident triggered an investigation by the inspector.
The General Administration of Taxation is a key oversight body for ATO, responsible for whether internal ATO practices and procedures correctly identify internal fraud.A report and suggestions will be released in June.In a media interview last year, Jordan described the Cranston incident as an \"isolated incident \".
He admitted that this raised questions about the integrity of the tax bureau.\"As a leader in the strong transformation momentum of ATO;As a commissioner, build trust and confidence in ATO with the community and stakeholders;As a reformist who tries to bring perspective and sensible risk management to the bureaucracy;As a colleague who has a great respect and affection for Michael Cranston, this is one of the most difficult things I have encountered in my career, \"he said.Still, Jordan and Jenkins don\'t think the ATO needs more oversight, and Fels and many others are in dispute about it.
\"There is no better way to achieve trust than having the proper mechanisms and oversight,\" Fels said .\".\"ATO actually has unlimited power and must be balanced by strong, good power --There will be independent mechanisms for abuse of resources.Small Business Ombudsman Kate Canell believes the powers of inspectorsThe general situation of taxation should be studied.
\"If an independent entity does not have the power, the ability or the scale to actually deal with the issue we are talking about, then it doesn\'t make much sense to have it,\" she said .\".\"The inability to provide these suggestions can be a real problem.It must have teeth if you want to have a separate entity, and it must have size.
Mark Freeman took over the ATO but most did not.He was charged with tearing off the ATO and being fined.He objected, but that did not prevent the ATO from giving him a $165,000 garnishee notice on May 2014.
Garnishee is a notice issued by the tax bureau to the taxpayer\'s bank asking it to hand over a certain percentage of the money in the bank account.ATO wrote to his bank saying, \"the black water treatment system owes us money and may open an account with you.Enclosed is a notice asking you to deduct the amount from any account held and send the money to us.
It hit Freeman in the eye.
\"Our rating of the Bank is down right away,\" he said .\".\"Obviously, this is a huge financial blow to the company and a huge blow to the company\'s reputation.Any business that receives an order from garnishee is always considered a bad payer.
Someone called him from the tax office and threatened to destroy his company if he did not pay the debt.\"I can only say, \'Do your best \'.37 companies are wound up by ATO or issued notice of bankruptcy every week.Deborah Jenkins, deputy commissioner for small businesses, said it was a \"very, very small number \".
She said they should call the ATO if anyone has a problem.She said the ATO issued about 24,000 garnishee notices each year, of which 14,000 were related to small businesses.Carnell described garnishees as \"too far away\" because they can destroy a business.
\"When the ATO takes action, it can do a series of things: it can issue a statutory notice, it can put in a notice of punishment from the director, it can run with garnishees, it can end a business.They are all ordinary, but garnishees, they seem too much for me.The problem, she said, is that the ATO should strike a balance between the recovery of its arrears and the impact of its actions.
\"They \'ve changed a lot, they \'ve done a lot of good things, but getting compliance, and their small businesses, they need more work in their consumer engagement areas to better balance.The tax bureau receives 25,000 complaints from taxpayers every year.Independent supervisory body, InspectorThe State Administration of Taxation receives more than 2200 complaints each year.
Most are related to debt collection.
In its latest annual report, the ATO revealed that more than 24,000 taxpayers had questioned the tax bureau about their alleged debt owed but disputed.But most people turn over before they come up with objections.Kate Canell\'s office has also been busy handling complaints.
Of all the complaints received in her office, she said, it was considered the most difficult to deal with and involved the most red tape complaint being ATO.But since Tax Commissioner Chris Jordan took the top post, she said, the focus on small businesses has been \"stronger\" and has tried to make their lives easier.The biggest problem is how to deal with the dispute when the ATO goes wrong.
There are calls for change.
Carnell described the process as slow and opaque and described the compensation as too low.According to its financial report for 20162017, the compensation paid by the ATO was slightly higher than $800,000, equivalent to the median of $500 per person.\"I think that if the ATO makes a mistake, they have to compensate in a timely and appropriate manner.
It doesn\'t make sense for a small business that has gone bankrupt for two years, \"she said.She also believes that the compensation area requires a pair of clean eyes to observe.\"It seems a bit difficult for ATO to determine what compensation they should get.
..It may not be a fair competition.
For larger taxpayers, there are two ways to deal with compensation, the compensation plan or the court system, Jenkins said.\"People have these two choices.When people pass the compensation plan, we have already worked with them.Freeman may have something to do with lowball\'s compensation proposal.
On November 23, 2015, ATO admitted that he had made a mistake and paid off what he said was owed.He received a letter from Small Business Minister Kelly O\'Dwyer\'s office saying, \"the tax commissioner has informed that the errors found during the audit process have been obtained after you filed an objection applicationIt states, \"the commissioner apologizes for any stress or inconvenience caused by these errors.On October 2016, ATO provided Freeman with compensation of $1500.
He appealed, and six months later the money rose to $11,500, still well below his cost.Freeman requested a third review.If it fails, he will consider taking legal action if he can afford it.\"At the beginning, people say, \'Pay them \'.
You can never win.
But we did win.
We beat them on debt and they gave us compensation.We are right. we are entitled to compensation.We need a collection agency to pay the service fee.We certainly don\'t need an institution that wastes time on people who haven\'t done anything wrong, just want to give it a try.
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