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Moscow on the Molonglo. Inside the ATO

By johnboy 10 March 2013 17

Dianne Gray has blogged at length about the kafkaesque nightmare of the Australian Taxation Office.

It’s only one side of the story, but quite a read.


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Moscow on the Molonglo. Inside the ATO
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legal 2:35 pm 12 Mar 13

I had a $7000 debt – which I was paying off – turn into $56,000 after the ATO alleged I owed more money. They refused to provide evidence or details of their allegation, just the integrated client account. I was told by ATO that the dispute resolution process began by paying your alleged debt in full, then you may dispute a debt. They never replied to any correspondence or complaints despite a one month maximum response time mandated by legislation. The person who called frequently could not communicate effectively (for a matter so grave to the taxpayer) and I could never get a reference number for advice or verbal information they provide. As soon as the ATO handed the matter to private debt collectors they demanded up front 100% of payment with no time to pay.
Unlike other creditors the ATO are judge, jury and executioner, able to allege a debt without proof and effectively have an enforcement action without proving their claims in court.
In the end I went bankrupt, which forced the ATO to prove their debt to another government department. They couldn’t prove a thing and the bankruptcy was annulled. No compo, no apology, no repercussions over a false allegation of a debt, violating their own statutes repeatedly and the loss of three years of productive work and life and my creditworthiness ruined for the rest of my life.
I also had my accountant suffer the same downfall over a $10k debt which the ATO alleged to be in the hundreds of thousands. One day the ATO flew two grossly overweight, opinionated $5000 suit wearing auditors charging the ATO tens of thousands who demanded access to an unrelated business’ offices. After forensically going over his accounts at great expense they found he owed less than they thought, but ratcheted up the expenses to charge him $28,000 because their claims (as legally binding as a court order) were now proven to be embarrassingly baseless. The ATO views small business as prey, fresh meat for the grinder since they know SME’s prefer to resolve matters and not drag them out in expensive, directionless bureaucratic processes.

EvanJames 10:29 am 12 Mar 13

Auntyem said :

I have updated my post about the ATO code of conduct charge after receiving an ‘anonymous’ response in my comments section from the ATO. http://diannegray.wordpress.com/2013/03/12/response-from-the-ato-anon/

I was hoping you’d snaffled their headers and IP, good work, you did! This is a serious breach of any department’s “code of conduct”, sending abusive e-communications, and they’ve gone further and used privately-held information on you. Some of us would be finding a really motivated lawyer at this juncture, and going them.

The whole horrible affair made scary reading, I’ve seen other departments on the code of conduct warpath and it’s pretty ugly. Fairness goes out the window as they charge along their pre-determined path, guilt is already assumed and the process is just to justify it. Derailing them is almost impossible, I’d love to hear of anyone who has managed to do it.

Reading your story, it seems that sending an email to a non-government email address, with an attachment, rang the warning bell they’d set up, and actually determining whether the attachment was sensitive or inappropriate was beyond their scope. The very fact of its existence was sufficient to trigger the process.

It also made me wonder if the ATO is modelling its behaviour on the American IRS, which is huge, slow and completely unaccountable. Americans just want to stay off its radar. Once you’re on its radar, facts don’t matter, you’re in the grip of a Brazil-like nightmare where logic doesn’t exist.

Auntyem 10:19 am 12 Mar 13

schmeah said :

Auntyem said :

I have updated my post about the ATO code of conduct charge after receiving an ‘anonymous’ response in my comments section from the ATO. http://diannegray.wordpress.com/2013/03/12/response-from-the-ato-anon/

Let us know if you hear back about this breach of your privacy, though given the labyrinthine nature of the bureaucracy in sorting out their own house, I guess it’ll be a couple of years.

I’ll let you know if they get back to me. I’m sure ‘anon’ isn’t feeling very comfortable at the moment. What a silly thing to do…

Auntyem 10:18 am 12 Mar 13

schmeah said :

Auntyem said :

I have updated my post about the ATO code of conduct charge after receiving an ‘anonymous’ response in my comments section from the ATO. http://diannegray.wordpress.com/2013/03/12/response-from-the-ato-anon/

Let us know if you hear back about this breach of your privacy, though given the labyrinthine nature of the bureaucracy in sorting out their own house, I guess it’ll be a couple of years.

I’ll let you know if they get back to me. I’m sure ‘anon’ isn’t feeling very comfortable at the moment. What a silly thing to do…

schmeah 10:06 am 12 Mar 13

Auntyem said :

I have updated my post about the ATO code of conduct charge after receiving an ‘anonymous’ response in my comments section from the ATO. http://diannegray.wordpress.com/2013/03/12/response-from-the-ato-anon/

Let us know if you hear back about this breach of your privacy, though given the labyrinthine nature of the bureaucracy in sorting out their own house, I guess it’ll be a couple of years.

Auntyem 7:52 am 12 Mar 13

I have updated my post about the ATO code of conduct charge after receiving an ‘anonymous’ response in my comments section from the ATO. http://diannegray.wordpress.com/2013/03/12/response-from-the-ato-anon/

schmeah 6:01 pm 11 Mar 13

This is the same agency which awarded a cleaning contract to an enterprise that had a long history of financial mismanagement in other states and territories and was, fiscally speaking, clinging to life. Hence, when the cleaners started they didn’t get paid for X number of weeks by their employer (the contractor – can’t remember the name). From memory the cleaning staff went close to 4 weeks without pay. (Imagine not being paid for close to a month as a public servant & then imagine not being paid the bread crumbs you earn as a cleaner).

The whole scenario is made worse if you make the assumption that being awarded a cleaning/maintenance contract for a major agency is kind of a big deal and would probably have undergone a competitive tender process .. makes you wonder sometimes.

Affirmative Action Man 4:32 pm 11 Mar 13

Unfortunately in the bureacracy once one person makes a stuff up (The HR Determining Officer) line management finds it almost impossible to overturn & instead of doing the obvious thing & telling them they are a knob they just keep promulgating the blunder up the line.

milkman 3:44 pm 11 Mar 13

Dilandach said :

Ohhh the nightmares of ATO IT I could tell….

+ heaps. The place is laughably out of control.

Dilandach 2:40 pm 11 Mar 13

Ohhh the nightmares of ATO IT I could tell….

Seen the movie ‘Brazil’? You have? Man, I’ve lived it.

HiddenDragon 11:22 am 11 Mar 13

I can’t help but wonder whether part of the problem here is that APS internal management policies and procedures have become too cumbersome and complex. Combine that with the all-too-common tendency to backside-covering, managing upwards and an “I don’t care, I just work here…” attitude, and you get horror stories like this, and the many others which could no doubt be told.

Ben_Dover 10:28 am 11 Mar 13

wildturkeycanoe said :

Getting help from either over the phone is impossible. No wonder accountants are becoming the norm for doing tax returns.

Anyone not using an accountant to do their tax return is giving away money to the taxman.

(I use Matt at Sleigh PLC, damn good chap.)

Thumper 10:10 am 11 Mar 13

I had my own problems with the ATO a few years ago.

I’m not sure that I’ve ever dealt with a more disfunctional place.

A place where no-one takes responsibility for anything and logic is a completely foreign concept.

wildturkeycanoe 8:45 am 11 Mar 13

I just love how the tax brackets and thresholds work. They can adjust your taxable income by a few hundred dollars 2 years after doing a return, then because you go over a threshold you get stung by twice what the adjustment was. They don’t talk to Centrelink, Centrelink doesn’t talk to them and because of this people have to get a degree in mathematics to work out how each affects the other in their return. Why, when two government departments refer to each other in such detail on their websites and documentation, do they not have internal links to verify payments made so that mum and dad don’t get stung due to an error in interpreting the myriad of complex calculations and lack of specific information?
Getting help from either over the phone is impossible. No wonder accountants are becoming the norm for doing tax returns.

Auntyem 8:30 am 11 Mar 13

Thanks so much for posting this Johnboy. The entire ordeal was a nightmare. The MPC ended up writing a 7 page scathing report regarding the entire process and how it was ‘managed’ (for want of a better word’) by the ATO. I wanted to share it as well, but it names names and I was advised by the ATO that if this story was published I could not name names. I can send it to you if anyone is interested, but the names need to come out.

As far as I’m concerned the $32.50 they paid me was a win. I’m pretty sick of hearing about the ATO spending hundreds of thousands (of our tax dollars) on fighting (and losing) court battles due to their stuff-ups. We need a Tax Office that spends our dollars on roads, schools and hospitals. Because this process lasted two years I’m sure the amount of money spent on it (in wages) would have easily run into the tens of thousands.

One of the things I did during this process was to search Riotact for other people’s stories about Code of Conduct, so I thought it would be handy to have this here in case anything like this happens to anyone else.

54-11 12:06 am 11 Mar 13

As you say, JB, that is one side of the story, but I assume that she has presented it truthfully. What a disgrace the ATO is.

LSWCHP 8:36 pm 10 Mar 13

I hired a young software engineer back in 2005 who’d been at the ATO for about a year after graduation. He told me one of his main reasons for leaving was that he couldn’t tolerate the lack of engineering rigor and proper processes in their software development activities. Given the nature of what the ATO does, I thought this was astounding. He’s a great guy, so I trust that what he said was correct at the time.

This poor woman endured an appalling experience, and it sounds like they could do with the addition of some rigor and proper processes in other areas of the department as well. I think an apology is in order.

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