Tribunal finds applicant claiming to be a victim of identity fraud was “dissatisfied” with objection decision

In Van Gestel and Commissioner of Taxation [2014] AATA 396 the Tribunal found that it has jurisdiction to hear the applicant’s review of the Commissioner’s objection decision where the applicant contends that he was the victim of identity fraud. The Tribunal rejected the Commissioner’s contention that the applicant was not “dissatisfied” with the objection decision in the sense intended by the legislation and was therefore unable to challenge the objection decision. In what would appear to be a harsh outcome, the Commissioner contends that the applicant should approach the Australian Federal Police if he believes he has been the victim of identity fraud. In the meantime, the Commissioner says the taxpayer should pay the monies he is required to pay under the assessment

The facts were described by the Tribunal as follows:

This unhappy tale begins with the lodgement of Business Activity Statements (“BAS”) in respect of the periods 1 July 2010 to 31 July 2010 and 1 August 2010 to 31 August 2010. Both forms were lodged electronically. The first claimed sales of $11,098 in the period which attracted GST of $1,009 – but also recorded purchases of over $123,000, which resulted in a claim for input tax credits. After adjustments to take into account other monies the taxpayer owed to the Commissioner, a refund in the amount of $9,695 was paid into an account held in the name of a third party. The Commissioner says the third party account was nominated by the taxpayer over the phone. The second BAS also recorded an excess of purchases over sales and a fuel tax credit leading to a total refund of $8,791 after adjustments. That refund was paid into an account in the name of a different third party whose identity was also supplied to the Commissioner over the phone.

The Commissioner subsequently conducted an audit of the taxpayer’s business, only to find there wasn’t one. The taxpayer says he had not conducted a business for some time, and denied ever lodging a BAS in July or August 2010. He says he did not supply the names of the third party bank accounts or receive the money that was refunded. He claims he is mystified as to how the payments came to be made. He says he has been the victim of identity fraud, and thinks the Commissioner has been taken in by a fraudster as a result of shortcomings in internal processes. The taxpayer says the Commissioner should pursue the fraudsters rather than taking the easy option of attempting to recover the monies from the taxpayer.

On the question of jurisdiction, a person who is “dissatisfied” with a reviewable objection decision may apply to the Tribunal for review of the decision: s 14ZZ(1)(a)(i) of the TAA. The Commissioner referred to the decision of the Full Court in CTC Resources NL v Federal Commissioner of Taxation [1994] FCA 947 where it was concluded that it was not enough for the taxpayer to be curious about the outcome of an appeal if the absence of a favourable result would have no legal consequences for the taxpayer. The Commissioner contended that the objection decision concluded that the applicant was not entitled to claim the input tax credits at issue and the applicant agrees with this – therefore, there was really nothing left for the Tribunal to do as the review would produce no legal consequences for the applicant.

The Tribunal did not agree, noting that while the applicant did not dispute the reasoning in the objection decision, he disputes the factual premise on which the reasoning and the ultimate conclusion were based – namely, that he had sought credits in a BAS in the first place. He was therefore “dissatisfied” with the objection decision and a review of that decision necessarily extends to its factual basis, which may extend to the disputed allegation that the taxpayer never claimed the credits in the first place.

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