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ATO response to a letter four months ago
Hi everyone,
Four months ago I sent a letter to the ATO seeking explanation regarding my company’s late lodgment penalty. In the letter I noted that the Mollicker v Chapman 2000 case where the ATO is not a legal entity. I also sought explanation regarding the conflicting testimony of two tax agents on my late lodgment penalty. I have also sent them three money orders for my company tax liabilities drawn from my legal fictitious entity tax file number to settle them.
I have received this following reply which seems to only generally refer to my questioning of the ATO legality.
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We have reviewed your letter in line with the ATO Law Administration Practice Statement (PS LA) 2004/10 – Tax laws claimed to be invalid. This statement is published on our legal database which can be found on our website ato.gov.au by searching reference QC43599.
You’re not precluded from your taxation obligations by;
claiming tax laws are invalid
questioning the legality of the ATO
demanding ATO take actions or make payments, or
stating the tax system does not apply to you
It’s not the function of the ATO to enter into debate or give advice about issues not related to the administration of the taxation system.
It wouldn’t be our intention to issue a further response to any future similar correspondence.
Refusal to comply with your taxation obligations will not prevent legitimate action by the ATO.
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So what I am reading from this is that they are merely disagreeing with my questioning their legality but not the means by which I have made payments to discharge my company’s liability. Which means I can continue to do it and they will continue to accept it?
Should my response to this letter include letting them know that I recognise that I have the right to agree or disagree to contract with the ATO according to our mutually agreed terms. And regarding the ATO’s claim that there is no debate or giving advice between two parties in a mutual contract, I ask them to show me proof that I have at any time agreed to this condition? And where there was, I hereby waive that as it is not equitable.
I do not need to state anything regarding my payments because it seems like the ATO has quietly assented to those, having not sent them back and protested. Is that right?
Anyone else encountered a similar case where the ATO only disagreed about us questioning their legality but let the money orders and promissory notes they’ve made pass?
Thank you!
God bless,
Brian
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14 Replies
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Did YOU claim tax laws were invalid? That is the claim they are making against you. OR did you simply provide case law? If they are making false claims against you, you need to thank them for their response and rebut the presumption that you are making any claims. You are simply asking questions are you not? You can remind them that there are still outstanding questions that have not been answered and that once they are answered you will be happy to deal with any other matters they wish to address, then ask the questions again until you have established an agreement through a three step notice process. If an agreement has already been reached in this way (by a 3 step process with affidavit) then is their answer/claims in their reply not frivolous and vexatious?
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Hi Morag,
In my letter, I stated this:
A healthy business relationship via good faith, open and honest communication
In a business agreement, in which I consider the relationship between my company and The Australian Tax Office, which claims itself to be a legal entity (I reserve the right to contest this by invoking Moeliker v Chapman B8/2000 [2000] HCA Trans 242 (17 May 2000) if the need arises), both sides should act in good faith and also deal with each other in a fair manner. This may include ensuring that both parties are willing and able to proceed with a contract without unduly threatening the interest of either. It may also include providing open and honest communication to foster a healthy ongoing relationship.
It is based on this the above that I normally conduct my business relationships and I hope this is no exception with your entity.
Therefore I did not make a statement but merely said I note that this is the claim they made.
They have made no responses to my letters on this matter and all other matters in the past five months. I had already put them under the three-step estoppel rule on each occasion.
So this letter is in regards to a matter that has since been settled by assent. Their apologies for their lateness after I put them on default in June seems to suggest that all I need to do is to acknowledge their claim that it is a legal entity trading under the Commonwealth Government of Australia and ask them to confirm that I have paid my liabilities under my personal corporate entity (which I have been), is that right?
I wouldn’t need to do a three-step estoppel as it is a settled matter and I am only acknowledging they have answered to one item that I raised, is that right?
God bless,
Brian
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It seems you said you reserve your right to contest a claim that THEY were making and only if necessary, so you weren’t making a claim about the entity itself but your right to contest a claim they were making if the need arose, have I got it right? If yes then you just need to thank them for their kind reply and politely correct their error; perhaps a judgement call made in haste by a junior clerk? And now that this has been pointed out to them, there is no need to thank you for saving them from embarrassing themselves in court or any other arena that might air this matter. Just suggestions, I’m sure you can think of amusing or serious ways to deal with this too 🙂
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Here’s my proposed response to them.
God bless,
Brian
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Do you want me to make any suggestions for improvement?
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Yes please, if you see any. I haven’t sent it yet. I can afford to wait because this is not demanding payment.
Thank you!
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I love how you put it all back to me as questions as you answered me.
I’ll run rings around them as you suggest and ask them to clarify whether they mistaken me reserving my right to a claim as the equivalent of a statement. And I’ll also ask them if whether they wish to open a matter that I have put them on default. I will state my non consent.
God bless,
Brian
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Hi Brian I have changed your Notice radically because the way you wrote it makes it sound like you were starting another three step process by asking a list of questions etc. You really just need to thank him and establish that his letter has made no difference to the agreement established. You can also reiterate what has been agreed to in your response. Let me know if you can read this or do I need to send a PDF?
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Thanks Morag. I can read it and have made your suggested amendments.
God bless,
Brian
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Hi again Morag,
The ATO sent me a templated letter in response to our reply.
Lazy buggers!
I’ve drafted my response and spelt out that I sent them the letter, notices of default and the notice of default judgment months before their response. Then I also documented what our agreed terms are and requested they ‘cease and desist’ sending me correspondences to seek a new contract.
Please let me know if this is fit to post.
Thank you!
God bless,
Brian
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My first money orders didn’t have a Default and liability clause to them. However, my subsequent money order sent in August to extinguish a new liability had a letter that stated the BOE Act 1909 Section 47(2) and 48.
Would it be much problem if I hadn’t put a D&L clause? After all, they had defaulted on the matter by failing to reply after receiving three notices and also a notice of default judgment.
Thank you.
God bless,
Brian
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A default and liability clause allows you to carry out the penalty that is stated within the liability clause. If you don’t have one then you’ll just have to not use that wording.
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Oh ok, I have the clause built into my letter stating that their failure to reply satisfactorily means that the ATO has therefore agreed to my terms and conditions instead. And I laid those out with the agreed actions assumed from their assent.
I thought D&L clause was a separate letter or set of statements.
Thanks for clarifying for me.
God bless,
Brian
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