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ATO information sharing upheld in RDTI fraud case

11 April 2024
ato information sharing upheld in rdti fraud case

A taxpayer charged with attempting to make a false research and development tax offset claim was unsuccessful in claiming the ATO had unlawfully shared information with prosecutors.

The Queensland Court of Appeal has ruled the ATO is lawfully entitled to share information obtained by compulsory examination with prosecutors ahead of a trial.

In April 2019, Julie Van Eps (‘the taxpayer’) was charged by the Commonwealth DPP for attempting to unlawfully obtain a false research and development tax offset.

Before being charged, the taxpayer was compulsorily examined by the ATO.


The ATO then provided a transcript of the examination to AusIndustry – with whom the ATO jointly administers the research and development tax incentive (RDTI) scheme – and the Commonwealth DPP.

The taxpayer applied to stay the proceedings against her partly on the basis that the ATO’s decision to distribute the transcript of her examination had been unlawful.

While the primary judge of the District Court agreed with the taxpayer, the prosecution applied to the Queensland Court of Appeal who overturned the primary judge’s decision.

In making her case, the taxpayer relied on an earlier Queensland Court of Appeal case, R v Leach, in which the court ruled that the prosecution’s reliance on a transcript recording the questioning of the defendant shared by the ATO was unlawful.

In R v Leach, a majority of the court, in that case, found the production of the transcript and its use in the trial “conflicted with the ‘fundamental principle of the common law’ that the onus of proof rests on the prosecution and conflicts with this ‘companion principle’ that the prosecution cannot compel an accused to assist it.”

In the case at hand, the court ruled that “each of these steps [in Leach] in the reasoning of the majority is problematic.” They added that there was both statutory and common law support for the prosecution’s use of the transcript.

For instance, the court referred to the High Court decision of R v Independent Broad-Based Anti-Corruption Commissioner, which came after Leach and in a superior court.

In that case, the court ruled that evidence from a compulsory investigative procedure – such as the ATO’s examination of Van Eps – can be invoked if authorised by statute.

The question before the court was: does the applicable legislation under Div 355 of the Taxation Administration Act 1953 (Cth) (‘the TAA’) displace the taxpayer’s common law rights?

Unanimously, the judges found that, in this case, it did.

Div 355 of the TAA empowers tax officers to disclose protected information to a law enforcement agency to enforce the law against a serious offence.

“Having regard to the words used, and the object of the provisions, the legislative intention could not be clearer,” said the court concerning the TAA’s explanatory memorandum.

“Notwithstanding the position at common law, the TAA expressly contemplates that a person may be compelled to provide to the Commissioner evidence or information, for the purposes of the administration (including enforcement) of the taxation law.”

In reaching this conclusion, the court ordered that Leach should be overruled.

The taxpayer also requested that the court adopt a pseudonym instead of referring to her by name partly on the basis it could adversely impact her reputation.

Despite the primary judge agreeing to do so, the Court of Appeal held there was no reason to do so and that reputational damage was a natural outcome of the principle of “open justice”.


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