from Crikey .....

Tax Office won't prosecute Australia's worst tax cheat

Tax consultant and former ATO audit manager Chris Seage writes:

Last Friday Second Commissioner of Taxation Bruce Quigley gave a speech to the Tax Institute of Australia in Tasmania. He let a sizeable cat out of the bag, telling his audience that in one case a $242million dollar assessment was raised against a high wealth individual involved in Operation Wickenby.

The tax office refuses to identify the individual concerned, citing privacy and tax secrecy concerns. A spokesman for the Commonwealth Director of Public Prosecutions told Crikey they were unaware of the matter.

Crikey understands the case was settled by the ATO with the tax cheat concerned willing to cough up the money owed. The tax office has granted the cheat what I call a quasi indemnity from prosecution. This is because the ATO have settled the matter for a monetary amount without referral to the DPP. The DPP never got to look at the file and cannot judge the case in accordance with the prosecution policy of the Commonwealth.

We have been told by tax commissioner Michael D'Ascenzo that Wickenby involves some of the worst tax cheating he has seen. False documents, hidden bank accounts and international profit shifting are just some of the descriptions he has used to describe the transgressions against our country's tax laws. So you can only imagine the sort of shenanigans this cheat was involved in to have to pay a $242million tax bill.

And what does Glenn Wheatley, the trophy boy for Operation Wickenby, think of all this? He was convicted in 2007 and sent to jail for 15 months for avoiding $318,092 in tax.

Let's look at some recent tax office prosecutions. In May they prosecuted a Sydney woman and she was sentenced to seven years jail in the Sydney District Court for GST fraud of $506,511. In April a Southern Highlands man has today been sentenced to three years jail in the Downing Centre Court in Sydney for GST fraud totalling $227,660.58. Where is the consistency? Or is there a different rule for the rich and powerful in this country?

Last year I told Crikey readers that it was time to name and shame our worst tax cheats  after details emerged on the ABC's Four Corners program of tax cheating on a grand scale by Australia's high-wealth population. Former Assistant Treasurer Chris Bowen said at the time:

I can see the attraction of naming and shaming. If the Commissioner came to me and said he wanted to do it, it's something I'd be open to but at the end of the day it's a matter for the Tax Commissioner as to whether to do that.

There is something wrong with the system when Wheatley and other prosecutions have the book thrown at them and a "high-wealth individual" who cheated $242million isn't referred to the prosecutor. It's time for new Assistant Treasurer Nick Sherry to have a look at the prosecution guidelines between the ATO and the DPP and fix them up. Sherry did not respond to questions put to him by Crikey.

On Friday Mr D'Ascenzo appears before Parliament's Joint Committee of Public Accounts and Audit for the Biannual Public Hearing with the Commissioner of Taxation. Chair Sharon Grierson's first question to him should be: why did you prosecute Glenn Wheatley for avoiding $318,092 in tax and not the cheat who avoided $242million? Let's see.