Problems in paradise: conscious maladministration in the ATO

Woellner, Robin (2015) Problems in paradise: conscious maladministration in the ATO. Journal of the Australasian Law Teachers Association, 8 (1-2). pp. 129-142.

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Abstract

Analysis of the decision in Donoghue v FC of T (2015) and its implications for the doctrine of conscious maladministration in Australia.

[Extract] Du Pont and Lubesky observed in 2013 in relation to the Canada Revenue Authority that:

"Even though the majority of tax officials are conscientious and play a vital role in the administration of the tax system, abusive audits can and do occur for a variety of reasons. Some cases have involved personally motivated malevolence toward a taxpayer, some ... [involved] administrative blunders within the tax department (such as lost records or inaccurate record keeping), while others simply result from inadequate training or supervision of the auditor."

So it is with the Australian Taxation Office (ATO) — and most large bureaucracies. The ATO has a proud record of service to the Australian community. Nevertheless, over the years, a number of taxpayers have felt that they have been unfairly treated by the ATO, and have taken action to attack the ATO's alleged lack of bona fides (good faith) in making assessments, or otherwise dealing with taxpayer's affairs. As noted above and discussed later in this article, similar concerns have been raised in other jurisdictions.

Despite some extreme situations, until 2015 taxpayers had invariably failed in such actions. For example, in Marijancevic v DCF of T, the court found that the ATO had acted 'too hastily in issuing a garnishee notice, too carelessly in addressing the garnishee notice letter, and too slowly subsequently in issuing default assessments'. Nevertheless, the court held that the taxpayer had failed to establish that the ATO had acted in bad faith.

Item ID: 43118
Item Type: Article (Research - C1)
ISSN: 1836-5620
Keywords: conscious maladministration; ATO; tax assessment process; reckless indifference; obfuscation; s 166 Income Tax Assessment Act 1936; legal professional privilege
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Previous version presented as a conference paper at the ALTA Conference, La Trobe University, Melbourne, 16-18 July 2015; revised version presented at ATTA Conference, UNSW, 19-21 January 2016

Date Deposited: 23 Mar 2016 01:48
FoR Codes: 18 LAW AND LEGAL STUDIES > 1801 Law > 180125 Taxation Law @ 100%
SEO Codes: 94 LAW, POLITICS AND COMMUNITY SERVICES > 9499 Other Law, Politics and Community Services > 949999 Law, Politics and Community Services not elsewhere classified @ 100%
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