Australian Taxation Office Exposed for Fraudulent and Dishonest Behaviour

By Emilio Lanera

In 2006, Helen Petaia started her own business called Safe Family Cards Australia (SFCA). The purpose of Petaia’s company is to deliver immediate access to critical medical information. This simple, yet brilliant, idea was inspired by a medical emergency Petaia had experienced. During the birth of her youngest son, the hospital was not able to locate crucial medical documents that were instrumental to ensuring a safe and healthy birth.

Petaia was able to find investors to back her enterprise, and won contracts with major sporting codes, such as the Queensland Rugby League and AFL Auskick. She was even awarded government research and development grants, and tax rebates, to aid her in her endeavour.

However, in 2012, Petaia’s hard work would be undermined by dirty tactics of the Australian Taxation Office (ATO). Petaia was accused of being reckless and making false and misleading statements. Following these accusations SFCA was audited by the ATO, and after a year of silence, the ATO sent her a letter that claimed she owed hundreds of thousands of dollars to the Office.

Under the impression Petaia had been fraudulent and dishonest, investors immediately pulled out. This, however, was not the case. Petaia had followed all the taxation rules to textbook precision, and yet, for some reason, was being accused of tax evasion.

When company cash flow began to dry up and Petaia could no longer pay her children’s school fees or the mortgage on her house, she decided to challenge the ATO’s accusations. In 2014, Petaia demanded that every document held by the Office regarding herself and her business be provided to her. Not long after making these demands, ATO Assistant Commissioner Daryl Richardson called Petaia to explain that an error had been made in processing her documents. Richardson apologised and offered her $20,000 in compensation for the ramifications of this mistake.

The compensation offered was nowhere near the millions of dollars Petaia lost. Outraged by this injustice, Petaia decided to enter into mediation with the ATO in February this year, in an attempt to reclaim the millions of dollars she had lost.

Petaia is expected to be involved in a lengthy and costly legal battle with the ATO. However, this does not seem to deter her, as she says “Somebody eventually has to win against the Tax Office. They can’t keep winning just because they have more money, just because they have more power.”

Living in a free and democratic country like Australia, one would like to think that Petaia’s unfortunate incident with the ATO is a one-off. However, according to ATO Debt Collection Officer Richard Boyle, these kinds of tactics are used quite regularly to increase tax revenue.

In an interview with Four Corners, Boyle revealed that in June last year he was instructed to “clearly and categorically start issuing standard garnishees on every case.” A garnishee is a debt collecting tool that allows the ATO to order banks to take money from a taxpayer’s account without consulting the taxpayer themselves. Banks are then required, on an ongoing basis, to take money whenever it is deposited into the account and send it to the ATO. These questionable directions were followed by an email sent to Boyle in May this year, stating “the last hour of power is upon us… that means you still have time to issue another five garnishees… right?”

Boyle was also instructed to target small businesses. He suggested the reasoning behind this was that small businesses are less likely to challenge the ATO as they lack the financial capacity to endure a court battle. The ATO tried to prevent Boyle from going to the media by offering him a payout, but the debt collector decided he could not remain silent on the matter. Since exposing the ATO, Boyle has been suspended without pay, and was notified by the ATO they intended to dismiss him.

Although the ATO is attempting damage control, both Petaia and Boyle have exposed the agency for its fraudulent actions. Millions of Australians are furious, especially those who own or work for small businesses. The public is demanding that the Government undertake a public investigation of the ATO. Doing so it will allow Australian taxpayers to see that correct measures are being taken to quash corruption, and ensure that no one in the future has to endure a fate like that of Helen Petaia.