INTHEBLACK May 2025 - Magazine - Page 30
F E AT U R E
areas of the law, including tax law,
company law and family law. Given this,
multiple regulators have different areas
of responsibility.
Ruth Owen CBE, Australia’s
inspector-general of taxation and taxation
ombudsman, is acutely aware of the
situation, which has been the focus of
her first review since her appointment
in July 2024.
The review examined the ATO’s
current systems, policies and processes
to identify and manage financial abuse
and coercive control within the tax and
superannuation systems. CPA Australia
made a submission as part of this
investigation in December 2024.
“I think the issue of financial abuse is
gaining significant momentum and attention
in public policy. We have received valuable
input from academics and community
organisations supporting victim survivors
of domestic violence, and the tax sector
itself is starting to recognise this as a serious
problem that we need to address,” she says.
“The Parliamentary Joint Committee took
a much broader approach than my remit
allows, examining the entire financial system,
ASIC and directorships, child support, family
law, insurance and developments in state and
territory legislation, as well as considering
potential policy changes to make it more
difficult for abuse to occur.”
Owen’s review, which was released in
April [see breakout], is focused on the
practical things that the ATO could do
now to identify and support victim survivors
of financial abuse.
“The most common cases we are seeing
is the misuse of directorships. These are
where spouses have unknowingly or under
coercion become directors of companies of
which they have had no control. We’re seeing
complaints from people saying they’ve had
director’s penalty notices in respect of the
company tax debt, and they didn’t even know
they were a director of the company, let alone
that they were actually liable for debts,”
Owen reports.
VULNERABLE CIRCUMSTANCES
Another example is how the tax system can
be weaponised in relation to child support.
30 INTHEBLACK May 2025
“One of the more insidious ways we’ve seen
this is where perpetrators avoid lodgement
of their income tax returns or under-report
their income, which in turn delays their
assessment for child support obligations,”
Owens says.
Dal Pra agrees. “The main goal of financial
abuse is usually to lower income, especially
for things like child support.”
“Further abuse occurs where outstanding
lodgements are brought up to date, shifting
the income position and creating other debts
for the victim survivor, such as Family Tax
Benefit debts,” Owen says.
Scott says that abuse can involve restricting
access to money or bank accounts,
concealing financial details, taking on
debt without the other person’s consent,
undermining job or educational prospects,
or more commonly after separation,
manipulating financial circumstances to
reduce child support obligations.
The ATO says it is aware of the growing
number of taxpayers presenting with
a range of vulnerable circumstances
and that the impacts of financial abuse and
coercion are of considerable concern.
“We are committed to ensuring we do
our part to enhance the way the system can
operate to both prevent and improve the
response to these impacts,” a spokesperson says.
“The ATO wants to reassure taxpayers
[that] there are options available for
those who are experiencing vulnerable
circumstances, and they should discuss any
support they need with the ATO.
This includes pausing recovery action to give
the taxpayer time to seek advice and support.”
It is an approach Owen considered
in the review.
“Outside of the courts and tribunals, there
are very limited circumstances in which the
ATO can permanently remove a debt from
a taxpayer’s account. We are aware these
limited powers are not specifically aimed
at combatting financial abuse,” she says.
“We considered in our review what is
possible within the existing powers of the
ATO to both give relief or release tax debt
for victim survivors on tax debt that they
had no actual involvement in creating.
Where new powers are required, this would
be a matter for the government to consider.” ■
