Tax data sharing

I have long been concerned by the ATO engaging in data sharing with foreign governments – after all, we can’t be sure that foreigners have the same levels of privacy protections that we do. Any data shared with a foreign government could very easily end up in the hands of criminals.

Sorry foreigners – that was a jingoistic attitude. From The Australian:

 Australian Taxation Office Deputy Commissioner Michael Cranston has been issued with a notice to attend court for allegedly abusing his position as a public officer in relation to his son Adam’s alleged involvement in a $165m tax fraud syndicate.

Nine people have been arrested and charged in connection with a sophisticated syndicate that allegedly stole $165m from the Commonwealth, in what AFP is calling one of the most significant white collar organised crime operations in history.

The Financial Review  are a bit more forthcoming as to the actual allegations:

Mr Cranston, the man who leads the Tax Office audits of the country’s richest people and private groups, was said to be “shocked” when he was informed on Wednesday of the $165 million fraud alleged by the federal police.

Mr Cranston, 58, will appear in court on June 13 and will be charged for allegedly publicly abusing his position as a public officer by accessing Tax Office records requested by his son, Adam.

“It appears that his son has asked him to access some information potentially,” Australian Federal Police officer Leanne Close told reporters on Thursday.

Three other ATO officials are being investigated for a “code of conduct” breach.

Two points – these are allegations at this time and the matter is before the courts. All the media reports indicate that  Michael Cranston does not seem to be involved in the fraudulent behaviour itself.

This is an astonishing breech of taxpayer confidentiality by the ATO itself.  That taxpayer details are so insecure that they can be passed on to anyone – let alone criminals – suggests that their internal processes are in need of external review.

Update I: duncanm provides some additional information in the open thread.  Link 1. Link 2.

Update II:  In the thread the question of the ATOs social licence to continue operating has been raised – somewhat tongue in cheek. But there are real questions to be answered.

Prime Minister Malcolm Turnbull has defended the integrity of government agencies after Michael Cranston was issued with a the notice to attend court, writes Primrose Riordan.

Mr Turnbull was grilled on whether it was a failing of processes and integrity measures in the public service.

Mr Turnbull simply said it was a credit to the federal police and the government was “ever vigilant” about possible issues of corruption and abuse of office.

Yes, well. What else could he possibly say? In the fullness of time, however, I expect an explanation as to how the extensive paper trail and the tally of money received, against the money owed, and the money declared by companies and then also separately reported by individual taxpayers on the group certificates all deviated without anyone noticing until  some $165 million had been defrauded. Yet another ATO internal process that needs reviewing.

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23 Responses to Tax data sharing

  1. marcus

    Yet again the government is out-witted by the real world…

    Yes, please give them more of my money to spend.

  2. Cynic of Ayr

    Every day, without fail, Kerry Packer is proved to be correct.

  3. C.L.

    allegedly stole $165m from the Commonwealth

    Or, to put it another way, kept what the Commonwealth was trying to steal from them.

  4. Cynic of Ayr

    I’m sorry, I only wanted to post the Youtube address, not a screen inviting it’s activation.
    Readers should be able to choose to activate youtube from another source, or not.
    Apologies again to anyone offended.

  5. Rabz

    Why would one be offended by a still of the Goanna in full flight?

  6. Motelier

    Avoid paying tax by any means necessary.

    Support those that are in the cash economy or barter for goods and services. Make them prove that tax has been avoided.

    As Kerry Bulmore Packer PBUH said.

  7. Roger

    The ATO DC has allegedly committed an offence every Commonwealth pubic servant is warned about on their very first day in the job. Astonishing.

  8. H B Bear

    These types of breaches are common in the police force. The ATO has powers that the police can only dream about.

  9. duncanm

    Scam seems to be:
    * dad tells son of the threshold at which ATO bothers to follow things up
    * son (and others. Possibly brother, who likes to play racecars with Adam, and sister included) sets up IT contracting payroll firm with many subsidiaries
    * Hundreds of millions — probably close to $1B — goes through the system in order to underpay tax to the order of $165M
    * many subsidiaries ensure that each individual scam sits just under the ATO threshold.

  10. True Aussie

    Wrong again Sinclair. Anyone who does business in a jurisdiction outside Australia, or holds citizenship in another country, is answerable to that foreign government and the ATO would be remiss in not sharing data. If a foreign tax department cannot be trusted then Australia should do no business with that nation and we should not allow a single immigrant or visitor from that country on our soil.

  11. jupes

    If a foreign tax department cannot be trusted then Australia should do no business with that nation and we should not allow a single immigrant or visitor from that country on our soil.

    LOL.

    You’re trolling right?

  12. .

    If a foreign tax department cannot be trusted then Australia should do no business with that nation and we should not allow a single immigrant or visitor from that country on our soil.

    What about the ATO???

  13. Tim Neilson

    If a foreign tax department cannot be trusted then Australia should do no business with that nation and we should not allow a single immigrant or visitor from that country on our soil.

    In the light of this Cranston story, do you want other nations to take a similar attitude to Australia?

  14. stackja

    Chris Jordan AO was appointed as the 12th Commissioner of Taxation on 1 January 2013.
    Chris’s term as Commissioner of Taxation and Registrar of the Australian Business Register runs until 29 February 2024.

    ATO reveals one in five of Australia’s largest private companies paid no tax last year

    Approximately 22% of Australia’s highest earning private companies paid no tax in 2014, according to details provided to a parliamentary inquiry on Tuesday.

    Appearing before the Senate’s Economics Legislation Committee, Australian Tax Office deputy commissioner Michael Cranston revealed in 2014, approximately one in five private Australian companies that earn in excess of $100 million in revenue did not pay any company tax in 2014.

    Cranston made the comments when grilled by Senator Scott Ludlum and Senator Sam Dastyari about the federal government’s proposal to exempt some of the country’s largest corporate taxpayers from legislation to make detailed financial information about the companies public.

    The tax disclosure laws were legislated by the former Labor government and are due to come into effect later this year.

    However, former prime minister Tony Abbott and former assistant treasurer Josh Frydenberg argued in March there are real concerns among some of the private companies expected to fall under the laws that executives could be the target of kidnap attempts if their tax affairs are made public.

    Cranston told the inquiry there are several reasons why these unnamed firms did not pay any tax in 2014.

  15. stackja

    Roger
    #2383036, posted on May 18, 2017 at 1:25 pm
    The ATO DC has allegedly committed an offence every Commonwealth pubic servant is warned about on their very first day in the job. Astonishing.

    And Jordan?

  16. notafan

    allegedly stole $165m from the Commonwealth

    Or, to put it another way, kept what the Commonwealth was trying to steal from them.

    Not correct.

    The money was withheld from employees wages and stolen by intermediaries.

  17. notafan

    Other articles suggest that Cranston had staff check up on the progress , possibly to avoid the obvious red flag checking up on a related person would have sent up.

  18. notafan

    This isn’t tax avoidance or tax evasion but straight up fraud.

  19. notafan

    progress of the audit I should say

  20. Des Deskperson

    “Mr Cranston, 58, will appear in court on June 13 and will be charged for allegedly publicly abusing his position as a public officer by accessing Tax Office records requested by his son, Adam” .

    Presumably he is being charged under s 70 (1) of the Crimes Act 1914:

    A person who, being a Commonwealth officer, publishes or communicates, except to some person to whom he or she is authorized to publish or communicate it, any fact or document which comes to his or her knowledge, or into his or her possession, by virtue of being a Commonwealth officer, and which it is his or her duty not to disclose, commits an offence.

  21. Sinclair Davidson

    This isn’t tax avoidance or tax evasion but straight up fraud.

    Yes – I also saw a report that suggest superannuation money had been stolen.

  22. ned

    Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State

  23. Menai Pete

    How long before certain (almost former) ATO senior officers check in to rehab for depression and go on extended public service sick leave with pay … just sayin’…

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