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The Simple Solution to Solve the Budget

I have had an epiphany.

I can solve the budget shortfall for the Federal Government by showing the Treasurer how to raise unlimited revenue. My plan is simple. The legislation is already in place and the Courts and the AAT have shown us that it is possible.

We are going to tax dead people.

I am not talking about an estate tax, or death duty. That would be politically unpopular.

No, what I am proposing is that the ATO issue default assessments under s167 of the ITAA 36 to every single person who has died in Australia since 1936. How can the Government do this, you wonder? That’s the beautiful part of my plan – all the ATO has to do is to make a determination under s170 that every deceased tax payer avoided tax due to fraud or evasion. Then the ATO can go as far back as it likes and raise new assessments.

The Courts have said time and again in cases like Rigoli and Futuris that the ATO does not even need to try very hard to come up with a figure. They just need to have a bit of an educated guess and then it’s up to the taxpayer to prove that this figure is wrong.

So each deceased taxpayer can get a tax assessment for, say, $10m. Section 177 means that’s proof they owe the tax. And the proof of tax evasion? Well, the ATO doesn’t need to prove that either. That’s up to the taxpayer too. If a figleaf of justification was required (and it’s not, according to the Courts) the ATO will say what it always does in such cases – any taxpayer who owed such a large amount of money must have known they had more tax to pay. Ergo they deliberately understated their taxable income, ergo tax evasion.

Cheating non-taxpaying bastards. We’d lock them up if they weren’t already dead. On the otherhand, fortunately for the Government, being dead makes it hard for the taxpayer to prove their case. If there is a material witness to a question of fact, Jones v Dunkel says you have to produce them to give that evidence or risk an adverse factual finding. And no-one is more material to a question of tax evasion by a taxpayer than the taxpayer him or herself.

The plan is foolproof. Naturally it’s extremely unlikely any money will be collected from estates that have already been distributed and finalised, but quite alot of people will probably cough up a couple of million each to save the cost and expense of having to fight a losing battle against the ATO, with their unlimited litigation budgets.

This was right in front of our eyes the whole time. The Courts and the AAT have already sanctioned it, as recently as last week. Check out this if you don’t believe me.

Well, that’s that problem solved. I’m off to the middle east next to solve that little pickle by introducing effective Workplace Health and Safety Laws.
  

Posted in: Tax & ATO News Australia at 09 July 15

Nice noises from Joe Hockey

In an address to the Canberra National Press Club on Wednesday 22 May 2013, the shadow Treasurer had some very interesting and promising things to say about the possible future of the ATO.

 

• He wishes to foster a more co-operative relationship between the ATO and taxpayers
• The relationship should be based on mutual respect, not adversarial
• Taxpayers are not the enemy
• He recognises the ATO’s powers are too one sided
• ATO officers often seem to lack objectivity
 
Joe Hockey has promised a Coalition government will establish a Parliamentary Committee charged with the oversight of ATO administration.
 
If necessary, the Coalition may break up the ATO to separate its administration and prosecutorial functions.
 
This recognition of the deep flaws in the current audit and dispute system is a welcome and excellent development in the Federal election – coming as it does in a major speech following the budget.
 
Hopefully the delivery will match the rhetoric and we can look forward to a less aggressive and destructive approach from the ATO in coming years.
 
More about Joe Hockey's speech - click here.

Posted in: Tax & ATO News Australia at 22 May 13

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Author: David Hughes

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