I questioned Ms Owen – the Inspector-General of Taxation – about the alarming Supreme Court of Queensland judgment in The King v Clarke, a 2017 case where the ATO pursued a fraudulent criminal prosecution regarding an R & D application.

I pointed out how the court ultimately threw the matter out and found that ATO officers had deliberately altered expense statements, provided misleading affidavits to secure search warrants, lied to the Queensland Bar, withheld emails, and ignored legitimate R&D spending.

I emphasised the sheer imbalance of power in this persecution: an innocent defendant forced to self-represent for over four years against a massive legal team comprising up to 12 people, including multiple barristers, the ATO and the Attorney-General, alongside numerous ATO staff.

I highlighted the fact that the court explicitly ruled the ATO undermined the defendant’s right to silence, engaged in systemic oppression, and brought the administration of justice into disrepute.

When I asked Ms Owen if we could reasonably conclude there is something deeply wrong within the ATO given these lengths of persecution, she admitted that the language in the judgment concerns her greatly and touched on the core integrity of the tax system.

However, she declined to comment further, noting that an appeal is currently underway.

Transcript

Senator ROBERTS: Are you familiar with the judgement of the Supreme Court of Queensland in the case The King v Clarke?  

Ms Owen: Yes.  

Senator ROBERTS: This is a case dating back to 2017, which is well before your time, admittedly, in which the ATO alleged fraud in a research and development application, and the ATO referred the matter for criminal prosecution. The Queensland court found there was no criminal case to answer on the initial allegation, but the ATO persisted. On the recent court decision, the final matter was again thrown out and the court found that the ATO officers concerned deliberately altered expenses statements. The ATO officer concerned was involved in the preparation of false statements, provided misleading information in affidavits to obtain search warrants, lied in a briefing note to the Queensland Bar, failed to disclose emails and ignored the fact that R&D funds were spent on legitimate expenses. The court also found the ATO undermined the fundamental right of the defendant to remain silent, the conduct of the ATO amounted to oppression of the defendant and the conduct of the ATO has brought the administration of justice into disrepute and has the tendency of undermining the integrity of the court. The defendant self-represented for more than four years. I understand that on some days the CDPP, the ATO and the Attorney-General had some 12 people on the combined legal team, including three to four barristers plus numerous ATO staff in attendance. Would you agree, Ms Owen, that, on the basis of this case alone and the court decision, senators could readily form the view that there is something seriously wrong, maybe even sick, within the ATO for it to go to such lengths in persecuting an innocent person?  

Ms Owen: The quote that you’ve just read out from the ruling of that judgement—that language concerns me greatly. The way the conduct of tax officers was described in that judgement is exactly what we need to look at in terms of the integrity of the tax system. I am awaiting the appeal on that case before I consider—  

Senator ROBERTS: The ATO’s going to appeal, is it?  

Ms Owen: I think the Attorney-General’s office, the CDPP, has appealed. So, at the moment, I can’t comment further on that case while that appeal is outstanding.  

Senator ROBERTS: I appreciate that.