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Tax Counsel Tamera Lang ATIA attended the ATO Tax Practitioners Forum (ATPF) on Friday 25 February 2010.  The ATPF is an opportunity to professional bodies, tax practitioners and the ATO to identify, discuss and jointly attempt to resolve significant tax administration issues. Members of the ATPF are presented with opportunities to recommend products, services and/or administrative approaches that can assist with the smooth operation of the law for tax practitioners.

The first item for discussion was the recent natural disasters and their impact on tax practitioners and taxpayers. The ATO outlined their immediate and longer term strategies for assisting those affected by the disasters. The ATO has dedicated many resources to the recovery efforts, including a project to make direct contact with over 2,000 tax agents in affected areas. The ATO recognised that this initial contact will in many cases be followed up with additional support once agents are in a better position to understand both the gravity of the situation. Agents are also encouraged to proactively make contact the ATO if they or their clients are experiencing hardship or usual circumstances arising from the natural disasters.

In the immediate aftermath of the disasters, the ATO provided blanket postcode based extensions for some January/February lodgements, in an effort to ensure that agents in affected areas would not be penalised for late lodgments. However, such blanket extensions cannot be sustained in the longer term, so a more targeted approach will occur from this point forward. Once again, agents are encouraged to contact the ATO to make special arrangements for lodgments where either their practice or a significant portion of their clients have been adversely affected by disasters.  If members require further information on this topic, please contact me at Tax Policy.

The ATPF discussed the ATO’s approach to amendments following the Anstis decision. As a result of this discussion, the ATO will be writing to taxpayers who may now be able to claim self-education expenses, and offering automatic amendments to their returns (refer to ATO website for full details on the auto-amendments that will be occurring). Of relevance to agents is the ATO’s approach to contacting affected taxpayers. The ATO will be writing to taxpayers directly; affected agents will receive one letter setting out the process for the amendments and a list of their clients that will be receiving the ATO’s letters. It is hoped that this approach will reduce the amount of paperwork that agents handle (and/or have to pass on to their clients) whilst recognising that agents need to be kept informed of contact that the ATO makes directly with their clients.

The ATO gave an update on their small business benchmarks and cash economy audit program. In particular, members’ attention should be drawn to a “frequently asked questions” document that the ATO has published on the topic (available on the ATO website). Practitioners reiterated concerns that the benchmarks are in some cases inappropriately applied, as they may not be sufficiently “fined-tuned” for certain businesses. Concern was also expressed about the ATO’s practice of raising benchmarking issues with taxpayers directly, rather than via the registered tax agent. We reiterated that such an approach can cause distress and difficulties for both the agent and taxpayer.  The ATO stated that their officers’ scripting should make it clear to a taxpayer that they are allowed to have their tax agent present when answering questions, and may take questions “on notice” if an answer is not readily available. If members have instances where they feel the benchmarking process has been suboptimal, they are encouraged to report it to Tax Policy  (On a related note, The Tax Institute has lodged a submission with the Inspector General of Taxation, calling for him to review this area of administration).

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