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A former tax agent, with debts of over $36 million, has had his appeal to overturn an order preventing him from leaving the country shot down by the Administrative Appeals Tribunal.
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AAT affirms grounding of former tax agent amid bankruptcy probe
12 February 2020
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Peter Moltoni, a former tax agent who was stripped of his registration in June last year, had been issued a departure prohibition order (DPO) by the Commissioner of Taxation in November 2017 due to tax debts of over $36 million owed to the ATO.
Mr Moltoni had earlier asked the commissioner to revoke the DPO to allow him to travel to the United Kingdom, where his wife resided, but was subsequently refused, leading to Mr Moltoni’s application to the AAT to review the decision.
The AAT ultimately refused to overturn the commissioner’s decision.
Mr Moltoni, who had his CA ANZ membership terminated in December 2019, had argued that his tax liabilities were completely irrecoverable, noting that his intention to live in the UK would not impair the trustee of his bankrupt estate from performing his task.
The commissioner, however, highlighted to the AAT that there was a trail of evidence that could lead to conclude that there was at least some likelihood that Mr Moltoni was the beneficiary of the payment of $US21 million to a company registered in the British Virgin Islands that he had been linked with.
AAT deputy president Gary Humphries said that the trustee’s investigations had a “real potential to realise assets of Mr Moltoni’s estate”, and that Mr Moltoni’s tax liabilities were not completely irrecoverable.
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“Given the lack of transparency as to the fate of the $US21 million, it is impossible to say with precision what factors might influence [Mr Moltoni’s] behaviour should he now be permitted to travel,” Mr Humphries said.
“The commissioner also observed that there could be no guarantee that he will stay in the UK; it was possible that, once offshore, he could go to a place beyond the reach of the trustee altogether.
“Although there is no evidence that Mr Moltoni contemplates such a course of action, it would by the same token be imprudent to ignore that possibility, given that the hypothesis on which the commissioner is working, based on the available evidence, is that Mr Moltoni has a substantial nest egg secreted somewhere overseas and might place himself beyond the trustee’s reach so as to enjoy it unhindered.”
Mr Humphries did take into account Mr Moltoni’s submission that the DPO had a “severely deleterious effect” on himself and his family, and noted that it may be up for revocation in the future if it continues to bear no fruit to the investigation.
“I accept that there is hardship caused to Mr Moltoni and his family by the continuation of the DPO. That hardship is significant,” Mr Humphries said.
“However, I am also persuaded that the trustee’s investigations do require some protection, protection which would be afforded by the continuation of the DPO for the time being.
“I do accept, however, that the DPO becomes more oppressive the longer it remains in place, and at some point in the future, if investigations into the taxpayer’s affairs after a reasonable period have borne no fruit, it may be appropriate to lift it.”
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