During last year’s court case against Steve Vizard’s former bookkeeper Roy Hilliard, many people wondered about the middle-aged, bespectacled and slightly balding gentleman at the back of the court room taking copious notes. He seemed too well dressed to be a journalist.

It turns out our man was a senior tax auditor from the Australian Taxation Office. And not any old auditor — he was from the crack group known as the High Wealth Individuals Taskforce, which has been responsible for clawing back hundreds of millions of dollars from rich tax cheats over the past ten years.

So it should come as no surprise to learn that Vizard is now under investigation by the ATO.  All the allegations against him are on the public record due to testimony in court proceedings and television interviews from the bean counter Hilliard who alleges:

  • Vizard claimed a tax deduction of six paintings for the Vizard Foundation, but they were never purchased.
  • Vizard’s luxury holiday house in Port Douglas was purchased in the name of the foundation, which is a charitable organisation that pays no tax.
  • A secret cache of funds using as a vehicle a dodgy travel agency business owned by Hilliard to channel $2.5 million dollars into Vizard’s pockets.
  • The use of trusts to avoid tax.
  • Paintings which were purchased for the tax-exempt Vizard charitable foundation hung in Vizard’s home.
  • The Vizard foundation paid no tax for six years.

In tax terms these are serious allegations and I have no doubt the ATO has the capacity to get to the bottom of the controversy. Most of the allegations will be easy to audit.

But the $2.5m in cash may be a little harder to trace. In this vein they will also have to audit Hilliard to see where the money ended up. Auditors will use an audit technique known as the “asset betterment statement” to determine whether either party had unexplained increases in assets during the period. This will be crucial in determining which of the two pocketed the cash.

The allegations involve indictable offences under the Tax Administration Act, such as false and misleading statements and false accounting records with the intention to deceive or mislead the Tax Commissioner. If multiple offences are proven, Vizard could go to jail.

It is imperative that justice be seen to be done in this case and that is why Tax Chief Michael D’Ascenzo must involve the Commonwealth Director of Public Prosecutions now. The guidelines between the ATO and DPP make it clear that the offences must be referred to the DPP. We don’t want any secret deals involving Vizard paying all the tax and penalties to avoid prosecution. We’ve seen the damage the Robert Gerard tax fiasco did to the reputation of the tax administration, so D’Ascenzo needs to ensure that he gets this right.

The remaining stumbling block in all this is DPP Director, Damien Bugg QC — the man who wouldn’t prosecute Vizard over criminal offences relating to insider trading and the man who refused to take an interest in the Gerard case.