Last Friday, 24 February 2012, Tax Counsels Deepti Paton ATIA and Stephanie Caredes ATIA attended a meeting of the ATO Tax Practitioner Forum (ATPF). Many issues were discussed as put forward by both the ATO and the ATPF’s external members. A short summary of the main issues discussed follows:
- Refund verification – The Professional Bodies sought the ATO ‘s response to the impact of the decision in Commissioner of Taxation v Multiflex Pty Ltd  FCAFC 142 in December 2011 and the subsequent introduction of an Exposure Draft providing the Commissioner with the power to retain refunds for the purpose of verification prior to release.). The ATO led this discussion and noted that since the Multiflex decision, there had been a change in taxpayer behaviour towards claiming refunds. The ATO indicated that in the cases of refunds, they are keen to work closely with tax agents and their clients to resolve any concerns they may have to verify the refund as soon as possible. This is an issue on which The Tax Institute made a detailed submission to Treasury (insert link to submission) and actively sought to ensure the power to withhold a refund for verification that is given to the Commissioner properly balances a taxpayer’s entitlement to the refund and any risk to the revenue – see 2012 TaxVine No. 5. (Note that the discussion was held prior to the release of Tax and Superannuation Laws (2012 Measures No. 1) Bill on 1 March 2012.)
- Refund Integrity checks – The Professional Bodies again raised concerns in relation to refund integrity checks being carried out by the ATO (the item was also discussed at the previous ATPF meeting on 4 November 2011). As promised, the ATO provided statistical information regarding the number of returns stopped for review under this program for the 2011 year:
- 105,900 returns stopped with refunds of $446,921,218;
- 21,021 returns released prior to review with refunds of $78,639,211;
- 84,969 returns held for review, with refunds totalling $368,282,008;
- Around 30,000 completed reviews protecting over $80 million in revenue;
- 51,830 returns remain on hand (as at 29 January 2012) (of which approximately 7,500 are suspected of identity crime).
The ATO is actively looking to speed up the process of review and is currently piloting a small scale program where adjustments are made to a tax return and a letter is issued outlining the adjustment - the taxpayer is then invited to make an amendment if necessary. They will also review “aged” client refunds and intend to visit agents with more than twenty clients with outstanding refunds. The ATO confirmed its willingness to assist in resolving matters that are brought to their attention by The Tax Institute on behalf of its members. We thank those members that have sent through details of withheld refunds to date. Please submit any further requests, including tax agent name and number and taxpayer name and TFN (once approval has been sought from the taxpayer) to Tax Policy and The Tax Institute will forward Members’ requests to the ATO for action (on an in-confidence basis).
- Debt Issues – The Professional Bodies requested a discussion of the ATO’s current administrative practice in relation to multiple running balance accounts attributable to a single taxpayer and the ability to offset a debt on one account with a credit on another account. The ATO responded in detail to this issue including advising when in fact in can pursue a debt on one account and is not required to offset the debt with a credit from another account. Debt collection issues were also discussed at the ATPF. The ATO is aware of complaints received in respect of some of the practices engaged in by external debt collectors and affirmed the availability of a complaints system available through both the debt collection agency and the ATO itself. The ATO regularly reviews complaints received and is looking to resolve these issues. Members with complaints in this regard are encouraged to contact us at Tax Policy or the ATO directly.
- Tax practitioner interaction with the ATO – The ATO is actively looking to increase its engagement with tax practitioners with a move to using electronic means by which to communicate with tax agents. This would include more reliance on using the Portal. The ATO is aware of some of the difficulties that tax agents have experienced with using the Portal (in terms of stability and reliability) and is working to improve this system.
- Business Reporting and Registration – The ATO advised that they are looking at their business reporting requirements (in relation to, for example, the Australian Business Register) in light of the move to a National Names Register that will be hosted by ASIC. In light of this, the ATO is looking to expand their use of Standard Business Reporting.
- Lodgement Program – The outcomes of the ATO Lodgement Program Differentiation Co-Design Workshop were discussed at the ATPF. Please see the entry in 2012 TaxVine No. 5 for further details on the outcomes of this Workshop.
- Benchmarking - The ATO advised the ATPF that it welcomes the Inspector-General of Taxation’s review into the ATO’s use of benchmarking in the cash economy and awaits the Inspector-General’s report which it anticipates will be handed down at the end of the 2011-12 financial year. The Tax Institute has made a submission to the Inspector –General in relation to his review.
- Tax Time – The ATO noted that it will take a similar approach to Tax Time 2012 as it did for Tax Time 2011, including providing regular updates to the ATPF during the period. The ATO requested ATPF members’ feedback in relation to some features of Tax Time 2011 that will be incorporated into Tax Time 2012.
- Annual Compliance Program 2012 – The ATO is currently developing its Compliance Program for 2012 and will advise the ATPF on its progress in due course.
Members requiring any further information in relation to any of the above items should contact us at Tax Policy.