It does not matter that escalation at lower levels of the pyramid has very

It does not matter that escalation at lower levels of

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Braithwaite, 1992, Chapter 2). It does not matter that escalation at lower levels of the pyramid has very little bite with large corporations; at that level the objective is to signal escalation rather than cutting deeply into the corporate’s interest. The crunch is whether the tax authority is willing to escalate until it does reach something that bites. For the pyramid to work, fieldworkers must be confident that they will get senior management backing if they escalate. They have that confidence because they do not escalate or threaten escalation of a particular type unless they get backing at a level that can support that level of escalation. Fieldworkers would not escalate to an enforcement option and would not initiate assertive use of ATO powers without getting the backing of their leaders in advance. Fieldworkers, however, should not assume their leader’s support when they want to escalate to assertive use of ATO powers and beyond. They must be able to count on their backing when the fieldworker and leader agree in advance on the circumstances of the escalation. Once a litigation task force is established, control passes out of the fieldworker’s hands into the hands of the head of the task force (usually a lawyer). Assurance that at some point the lawyers take over as a matter of policy adds to the confidence and authority of the fieldworker who can say: Look, unless we can sort this out, the conflict will escalate to the point where ATO policy requires that it be taken over by a Litigation Task Force. Near the peak of the pyramid, no promises of escalation would be made without the backing of the Commissioner. Of course, many of the strategies in Figure 9.4 will be deployed for risk management reasons rather than out of any desire to give a signal that the behaviour of the taxpayer is causing their case to be taken more seriously. Sometimes when escalation up the pyramid is occurring, the circumstances will warrant a jump up several rungs of the pyramid. The pyramid represents a preference for resolving matters at lower levels, not a rule to do so. Starting at the base of a pyramid and moving up progressively is a presumption that can be overridden by compelling evidence, for example, of criminal behaviour or aggressive tax planning, that this is a case that should go straight to the peak of the pyramid. But we should be extremely reluctant to do that. It is a challenge to educate people that there is no single or correct pyramid, but that there is virtue in having the professionalism that comes from having thought through the range of responses through which a regulator can escalate when faced with non-cooperation. For example, one way to meet the challenge could be to build various compliance pyramids that deal with access to
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Large Business and the Compliance Model 199 information. A workshop would get a group of fieldworkers who confront a similar group of clients with similar access difficulties to co-design their own pyramid of escalated response to denial of access. In the course of the workshop,
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  • Fall '16
  • tax authority, Australian Taxation Office, Tax Office, Compliance Model

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