Publication date: 08 Aug 97 |
Source: THE TAX INSTITUTE
You just can't trust TaxPack, can you Commissioner?
The Administrative Appeals Tribunal has upheld an assessment by the Tax Commissioner challenging a taxpayers return which was completed using TaxPack '95 and a publication produced by the Tax Office detailing professional and business returns.
The Tribunal said that "the provision of publications such as TaxPack, whilst providing assistance to taxpayers cannot be a substitute for the legislation. Whilst the use of such publications may provide appropriate defence against the imposition of additional tax on any tax shortfall for failure to take reasonable care to comply with the Act, it can be no defence against the proper assessment of income tax in accordance with the Act."
Taxation Institute of Australia President, Mr Richard Gelski said that this was a sad reflection on the TaxPack product and should sound as a warning to all taxpayers to be extremely careful using TaxPack as their sole source of information for completion of their tax return.
"Although the TIA is supportive of what the Tax Commissioner is trying to achieve in creating the TaxPack product to assist taxpayers with self assessment, the fact that this 'simple' guide to the Income Tax Assessment Act is over 100 pages long reflects the complexity of Australia's tax system,' Mr Gelski said.
"Assurances printed in the front of TaxPack stating that it will "help you get your tax return right" should be taken aboard carefully by all taxpayers."
"TaxPack simply doesn't provide all the answers. And when it provides misinformation, the ATO should take responsibility if errors are made in reliance on the product!" he said.
Although the taxpayer in this case was not charged with a culpability penalty, he was required to pay the Tax Commissioner a significant amount of tax plus interest on this tax. The taxpayer also failed in his attempt to have the Administrative Appeals Tribunal waive the interest due on the assessed tax liability, the Tribunal pointing out that it had no power to review decisions on the imposition of interest, even where it arose from a defect in TaxPack.
"What is deplorable is that the Commissioner did not waive the interest. The Commissioner should take responsibility for the false and misleading conduct of the ATO," Mr Gelski said.
"This case further fuels the argument for review and reform of the tax system - even the Tax Commissioner gets it wrong when he attempts to simplify the tax return process for the average taxpayer through TaxPack".