Chris Leech: Detect and deter or catch and release

There is intriguing evidence supporting various quotations in an anecdote recounted by a friend of Holmes named Felix Frankfurter who joined the Supreme Court in 1939 four years after Holmes died. In 1938 Frankfurter published the book “Mr. Justice Holmes and the Supreme Court”, and he also wrote an article for the Atlantic Monthly magazine. Both publications included this story about Holmes [ATFF] [LPFF]:

He did not have a curmudgeon’s feelings about his own taxes. A secretary who exclaimed ‘Don’t you hate to pay taxes!’ was rebuked with the hot response, ‘No, young feller. I like to pay taxes. With them I buy civilization.’

Important new independent research by our seconded researcher from ATO, Chris Leech, with newly released data, on the role and effectiveness of financial penalties for intentional #tax evasion, on the blog and substantial working paper
Twitter by Miranda Stewart

Tax penalties play an important and often undervalued role in the tax system. They primarily serve two functions: to deter non-compliance, and to reinforce community perceptions that the tax system is fair because non-compliant taxpayers will suffer consequences. Most tax penalties are administrative financial penalties imposed by the tax authority, ranging from minor penalties to financial penalties imposed on deliberate tax evaders. This exploratory paper draws on new data relating to payment of tax penalties for false and misleading statements. The data is subject to limitations and qualifications as detailed in the paper. Overall, the data shows that the majority of financial penalties imposed on deliberate tax evaders are never paid. The paper then seeks to explain how this can serve to undermine the effectiveness of these penalties. The paper reviews literature explaining the role of tax penalties and the hallmarks of effective tax penalties. It also reflects on a chapter of Australian tax history where community perceptions that tax evaders were not being effectively penalised jeopardised the perceived fairness of the tax system. The paper argues that if the current tax penalty regime is not strengthened then this will likely pose a risk to the perceived fairness of Australia’s tax system, and it therefore proposes some potential solutions, including arguing for two new penalties to be introduced into the regime.

Detect and deter or catch and release: Are financial penalties an effective way to penalise deliberate tax evaders?: Workingpaper

Chris Leech

Chris Leech was seconded from the Australian Taxation Office to the ANU’s Tax and Transfer Policy Institute to work on an independent research project on the effectiveness of financial penalties for those taxpayers who intentionally disregard the tax law. The views expressed in the independent research paper are not an official ATO or government position. He holds a Bachelor of Arts/Law (Honours) degree from Monash University.

Austaxpolicy post: Are Financial Penalties an Effective Way to Penalise Deliberate Tax Evaders?

APO: Detect and deter or catch and release: are financial penalties an effective way to penalise deliberate tax evaders?

#Lookback Overall, data from the @ato_gov_au shows that the majority of financial penalties imposed on deliberate tax evaders are never paid. In our Working Paper 6/2018, Chris Leech proposes two new tax penalties. #austax
https://twitter.com/Austaxpolicy/statuses/1012099253152501760

 Tax and transfer policy institute annual report fiscal year 2016-2017

 

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Detect and Deter or Catch and Release: Are Financial Penalties an Effective Way to Penalise Deliberate Tax Evaders? by Chris Leech :: SSRN - SSRN papers


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New federal government measures to combat illegal phoenix activity - where a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts:
* Directors prevented from improperly backdating resignations to avoid liability or prosecution
* Directors limited from resigning when this would leave the company with no directors. * The Director Penalty regime extended to GST, luxury car tax and wine equalisation tax, making directors personally liable for company debts.
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Mehlman Castagnetti Rosen & Thomas: CONTENTS Q2 2018 THESIS & CONTENTS: Revolutionary Tools Enable Revolutionary Times – Reform movements succeed when the methods, motivation & moment converge. We are reaching such a time. [31 pages slide deck]

THE METHODS Revolutionary Tools Enable Revolutionary Times;  THE MOTIVATION Why Citizens Increasingly Demand Change; THE MOMENT New Leaders Emerging to Challenge Washington / Fill the Vacuum; WHAT’S NEXT Where We Go From Here

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"The UK's Serious Crime Strategy tries to capture the complex web of issues which lead to people becoming perpetrators and victims: from mental health problems, to deprivation, and lack of parental support. These are all issues which go well beyond the police’s remit." (Institute for Government) 

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Staff cuts, outsourcing contributing to 'toxic' Tax Office culture