Australian Tax Office uses unchecked powers to systematically destroy lives of Aussie business owners

Timothy Charles Pratten

The Australian Tax Office (ATO) has been exercising undemocratic powers that have been robbing Aussies of their livelihoods and a fair go. This is something former small business owner, Timothy Pratten, knows all too well.

Over the past 10 years, the former Insurance Broker has lost his home, business, family and freedom — having spent over three and a half years in prison. Despite being repeatedly let down by a system designed to protect him, he’s still fighting tooth and nail to prove his innocence.

The nightmare started for Mr Pratten in 2010 when the ATO arbitrarily declared he had been misreporting his income for the past several years.

“I was hit with a tax bill based on what the ATO Commissioner thought I owed — he can do this. As a senior New South Wales Supreme Court judge recently said, ‘the Commissioner of Taxation has powers far beyond those of mortal men… and can issue an assessment using information which doesn’t come anywhere near proof, leaving the taxpayer to disprove what he has assumed,'” said Mr Pratten.

After learning of the allegations, Mr Pratten actioned his right to Object to decisions made by the Commissioner. He did so under the time-frame prescribed but was ignored. He was then forced to elevate his Objections to the Commonwealth’s independent tax tribunal, the ‘Administrative Appeals Tribunal’ (AAT).

“As many taxpayers have found out, the ATO routinely ignores Objections, leaving us to turn to the AAT where the Commissioner knocks down Aussies wanting to challenge his decisions. At the independent tax tribunal, the ATO hires Queen’s Counsel to annihilate the taxpayer. What everyday Aussie can afford a QC? In effect, this robs us all of a due and fair process.”

Before trial, the ATO and AFP ensure Aussies have no funds to fight. This is done through property restraining orders which denies Australians the right to sell or mortgage any property to finance their legal fees — including their business.

“I quickly ran out of money and the only option left was Legal Aid. Here, I was provided with an inexperienced lawyer and a Barrister who had never run a jury trial before — I stood no chance.”

While Mr Pratten was on trial, the AAT was forced to put the review of his Objections on hold until the finalisation of his criminal proceedings.

“I had been arrested and was being prosecuted on the basis of the Commissioner’s untested opinion that I owed tax. That is all, just an opinion which was subject to challenge in the tax tribunal.”

Earlier this year, the 20th September marked a decade since Mr Pratten filed his Objections, with the matter remaining unresolved. In court, the Commissioner’s accusations were considered undeniable facts, resulting in Mr Pratten being found guilty and sentenced to three and a half years in prison.

The allegations against Mr Pratten were never questioned, despite a 2012 Inspector General of Taxation report finding the Commissioner was wrong in almost 34% of cases where taxpayers challenged their bills and penalties.

Now, one year out of prison, Mr Pratten will finally have his day in the AAT. But, before that he will be back in the appeals court, with his case due to be heard on the 12th February 2021. As a result of some talk in the legal community, a number of lawyers have expressed interest in assisting him at a greatly reduced cost.

Mr Pratten is calling on fellow Australians to reach into their pocket and help raise the $55,000 needed to cover his legal costs.

“I maintain my innocence of the crimes of which I was convicted. All I want is a fair go. If I win, it will completely destroy the ATO’s plan to use me as a precedent to scare Aussies into giving up their legal rights to challenge their tax bills. This is far bigger than me, I am fighting to put a stop to the ATO’s systematic approach to destroying Australian’s lives.”

/Public Release. This material comes from the originating organization and may be of a point-in-time nature, edited for clarity, style and length.