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Death, drought or fire - anything but the real reason

Publication date: 18 Apr 01 | Source: THE TAX INSTITUTE

"Death, drought or fire are considered to be grounds for extension by the ATO. The real reason however – that the whole tax reform process has placed impossible workloads on tax agents – does not seem to be acceptable," she said.

Ordinary Australians who are yet to lodge their year 2000 tax return may be in for a shock when they find their tax agent is struggling under the weight of the Government's new tax reform form-filling and are unable to complete the return by the 'designated date'.

If these people owe tax to the ATO, late lodgement of their return means they will have to pay a penalty calculated at around 14% p.a.

The Tax Institute and tax agents have been trying unsuccessfully to get the ATO to agree to a blanket extension of up to 8-weeks for all agent-lodged tax returns. If tax were paid when the return is lodged, rather than weeks later after a formal assessment, the government would still get its revenue in on time. An 8-week blanket extension would be a real win-win-win situation for taxpayers, tax agents and the government.

The next due dates are May 3 and May 17. However, with another round of BAS and IAS forms needing completion around then, finding time to prepare and lodge income tax returns will be an impossible task for many tax agents.

"Why should taxpayers and their agents pay penalties of up to 14% because of the government's inability to effectively implement the tax reform program?" said Ms McCleary.

"I would not be surprised if agents feel unable and unwilling to pay late penalties this year."

In past years, agents have often paid late lodgement penalties for their clients however, this year, agents have done everything possible, and more, to meet the requirements of the ATO.

"Penalties are not the fault of agents this year. They have given their blood, sweat and tears over the past year in the cause of tax reform and should not also have to pay over their own money as well," she said.

The Tax Institute is responding to Prime Minister John Howard’s failure to take action to an urgent appeal two weeks ago by the Institute requesting intervention into the deadline dates for lodgement of income tax returns.

"The result is that ordinary Australians are facing unwarranted penalties for failing to meet impossible deadlines imposed by the new tax system. It is simply not their fault."

"We again ask Prime Minister John Howard to respond urgently to our request for an extension for the lodgement of income tax returns. Our proposal will still bring the money in on time, but without alienating thousands of taxpayers and agents who are doing their best in tough times."