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Inequitable penalties imposed on agents for tax return by Internet

Publication date: 27 Jun 97 | Source: THE TAX INSTITUTE

Tax Laws Amendment Bill (No. 4) 1997 released yesterday imposes inordinately high penalties on tax agents who choose to lodge their clients returns electronically and neglect to pass on a copy of the return to their client.

According to Taxation Institute Senior Vice President, Mr Ken Spence, this move by Government is an insensitive one.

"Considering recent Government initiatives to implement an equitable penalty regime and associated disciplinary action via the Draft Regulatory Framework for Tax Agent Services and the draft proposal for streamlining calculation of penalties which emerged from the Small Business Deregulation Taskforce, this action to penalise tax agents up to $3000 for breaches of the Act contradicts the spirit of these reforms," Mr Spence said.

"The Government has not consulted adequately with industry at all on this issue which will affect tax agents across the country as they adopt this new system of processing returns," he said.

Penalties of 30 units ($3000) exist if a taxpayer has given the address of a registered tax agent as the taxpayer's address for service and the tax agent does not send a copy of any notice of assessment in respect of that taxpayer to the said address.

Similar penalties exist if a taxpayer's return or application for amendment is given on a data processing device, or by way of electronic transmission, by a registered tax agent on behalf of the taxpayer and the registered tax agent does not give the tax payer a copy of the return or application for amendment. Penalty is 30 units ($3000).

"Whilst the Taxation Institute supports the principle of enforcing penalties for breaches of the Act, this particular set of penalties relating to electronic lodgement and electronic transfer of funds appears to be extreme and in contradiction to recent actions by Government to consult with industry on important developments of this nature," Mr Spence said.