Two-fold strategy in search for justice

THE Australian Tax Office could be forgiven for thinking that the high uptake of its settlement offer to managed investment scheme investors has put the matter to rest.

But instead, angry investors have formed a group, Australians for Tax Justice, with the aim of getting back at the ATO and recouping lost money.

A steering committee comprising investors, representatives of the Project Tax Resolution Group, Australian Managed Investments Association, Australian Rural Group, financial planners, taxation lawyers and accountants has been meeting over recent months.

The group says its strategy is two-fold.

“Firstly, Australians for Tax Justice (AFTJ) will raise money to fund selected test cases that have the best possible chance of being successful in the courts,” an AFTJ statement says.

“This litigation will lead to a series of legal judgements, which will seek to overturn previous decisions, such as Budplan and Vincent, and force the ATO to negotiate a better and fairer settlement offer for all investors, including financial planners and those investors who have already accepted the ATO’s recent settlement offer.”

Financial planners were excluded from the offer made by the ATO to investors that could not claim tax deductions for projects that previously had been offered tax deductibility.

“Secondly, AFTJ will maintain maximum pressure on our Federal politicians through a coordinated national communication and media campaign,” the AFTJ says.

“After three years of hard lobbying in Canberra as separate groups and as individuals, we now speak to Canberra with one very loud and determined voice.

“Thousands of ordinary investors ... have been threatened and coerced by the ATO, and we are determined to see that the rights of honest investors are defended and protected from this type of injustice.”

Lawrence Henderson, who has taken up the fight as group co-ordinator in addition to his job as business development manager for the offshore group at Clough Engineering, said the body was gathering together pockets of investors from all walks of life and across the social spectrum.

“We have found a whole lot of people who have sat quietly for two years. We even have the unions behind us,” Mr Henderson said.

The ATO recently announced that 87 per cent of investors, or 36,300 of the 41,600 people who invested in mass marketed tax schemes, accepted its offer.

The 41,600 investors made about 58,000 scheme investments.

The settlement allowed investors to claim their actual cash outlays as a deduction. The ATO has said that most people who took up the offer will pay no penalties or interest and the first two years of an agreed payment period will be interest free.

“The aim of the offer was to allow investors to settle on fair and reasonable terms and put this matter behind them,” ATO tax commissioner Michael Carmody said.

But the AFTJ is showing every sign that investors will not go away quietly.

“What we can achieve, working together, as a single group is truly inspiring. We are so diverse and yet so similar – because we have a quiet, sustainable rage against both the Commissioner for Taxation and the Federal Government, which has allowed this travesty to continue, uninterrupted and unrestrained, for the past three years,” the group says on its website

“This is an opportunity to show how strong we can be; how disciplined and how forceful. This is our turn to control tax,” the group says.

An ATO statesman said he could not make any comment on the continuing fight with investors.

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