Victims of fraud and financial abuse caught in ATO’s pursuit of $56 billion

ABC NEWS (Australia)

Victims of fraud and financial abuse have been caught up in the ATO's pursuit of 56-billion dollars in tax debt owed by small businesses and individuals.

Transcript

00:00These were incredibly distressing stories to hear and these women are really brave speaking

00:08out.

00:09We have had to conceal their identity somewhat to protect their safety.

00:15But what they've faced is years of abuse, years of abuse.

00:20We've seen financial abuse, we've seen physical violence, verbal abuse.

00:25And when they finally got themselves out of these situations that have gone on for years,

00:32they now face a new ordeal with the ATO because their ex-partner has accumulated a tax debt.

00:39Typically it's within a business that they co-owned or that they didn't even know was

00:44under their name.

00:46And then as a director, they become personally liable for that business's tax debts, which

00:52can run into hundreds of thousands of dollars.

00:55So there's now calls for the ATO to firstly employ people who, you know, specialist staff,

01:02who can better deal with victims of financial abuse.

01:06And secondly, to change the law to give the ATO more discretion to waive these tax debts

01:12when it is clearly financial abuse.

01:15There's a lot of debt owed to the ATO, about $56 billion in debt.

01:20And the majority of that debt is owed by small businesses and the ATO says the majority of

01:26that is undisputed debt.

01:28And so, you know, it does have extraordinary powers to go after tax debts.

01:33And its job is, in fact, to collect revenue on behalf of the government.

01:37But the issue is how it uses those powers, particularly in cases like this.

01:41And some of those powers that it's using, for example, one of them is called issuing a

01:47director penalty notice.

01:48So this is issued against a director of a company for those tax debts.

01:53This is quite difficult for people because it makes them personally liable for the business

02:00debt.

02:01And it gives them just 21 days to pay that debt.

02:04Another power they've been using is garnishee notices.

02:07So this is where they just take money directly out of people's bank accounts.

02:12And finally, there's the use of reporting them to credit agencies.

02:18So then it makes them very hard for them to get a line of credit.

02:23So all these powers, you know, obviously the ATO needs it to be able to chase tax debts,

02:28but it's about using those powers wisely and appropriately and particularly taking into

02:33account victims of fraud and financial abuse.

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