MONA founder in Tax Office sights
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MONA founder in Tax Office sights

DAVID WALSH, the eccentric professional gambler and founder of Tasmania's Museum of Old and New Art, has found that cloaca happens.

Having spent $180 million establishing MONA, the most famous exhibit being Cloaca, a complicated poo-producing machine, Mr Walsh is now involved in a legal stoush with the Australian Tax Office.

In deep cloaca ... David Walsh.

In deep cloaca ... David Walsh.Credit:Peter Mathew

According to documents filed in the Federal Court, Mr Walsh, of the Hobart suburb of Bellerive, is disputing a revised assessment by the ATO for the 2004, 2005 and 2006 financial years.

The 50 year-old was hit with the amended tax bill in November and subsequent mediation with the ATO has failed to resolve the issue.

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The ATO's pursuit of Mr Walsh follows the Tax Office's action against his business associate, the reclusive Zeljko Ranogajec. Mr Ranogajec told associates last year the ATO is demanding about $900 million for 10 years of back taxes, penalties and interest.

Reputed to be one of the world's biggest gamblers, Mr Ranogajec's gambling operation is estimated to account for up to 8 per cent of bookmaker Tabcorp's $10 billion annual revenue. His wagers with Betfair's Australian outfit are believed to be a third of the total revenue.

''The assumption that he owes them money depends on the assumption that gambling is taxable and that has never happened in Australia,'' Mr Walsh told News Ltd last December.

The two men met at Wrest Point while university students. They made their fortunes by developing a betting system that uses complex mathematical algorithms to place thousands of bets just before a horse race starts.

How much the Tax Office is asking Mr Walsh to pay was not revealed in documents filed with the Federal Court. The matter will be back in court on August 9.

Kate McClymont is an investigative journalist at The Sydney Morning Herald.

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