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03 Apr 09 On withholding refunds

MEMBER 2 writes:

"One of my clients has been in credit of $1,786 since 15/07/2008. This is the result of the ATO transferring a credit from the integrated client account to the income tax account. My client’s 2007 tax return was processed on 12 May 2008.

What gives the ATO the right to hold onto someone’s money indefinitely? As the funds were transferred to the income tax account than surely the ATO has a responsibility to send any moneys in credit to the taxpayer’s income tax postal address. Is it even legal for the ATO to hold onto someone’s refund without at least advising them of a credit? I am sure that even though the ATO will pay a meagre interest on holding my client’s money it still does not make it right that they are holding onto someone’s money without any legal right to it.

Surely the ATO’s legal team should look into this practice of withholding someone’s money without any right to it."

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