On Friday 2 November 2012, Tax Counsel Stephanie Caredes CTA 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:
- Penalties for false or misleading statements made to the Australian Business Register – The ATO advised members that a 2010 amendment to the Taxation Administration Act 1953 (Cth) expanded the administrative penalty provisions to now encompass false or misleading statements made to the Australian Business Register. Law Administration Practice Statement PSLA 2012/4 was issued on 23 August 2012 following which the ATO will now consider imposing penalties on entities who make false or misleading statements when applying for an ABN or to maintain their ABN registration.
- Contractors and Sub-Contractors in the Building and Construction Industry – The Professional Associations requested a discussion in relation to several issues concerning contractors and sub-contractors in the Building and Construction Industry and more broadly. Members raised concerns regarding the circumstances in which the ATO views a person as a contractor rather than an employee and queried the “review” process the ATO undertakes to review these types of relationships given the change that has occurred with the removal of the “prescribed payments system”. The ATO advised it will consider the entirety of the relationship between the employer and the person engaged and does not consider the provision of an ABN as sufficient evidence of a “contractor” relationship. The ATO’s focus is on the tax and superannuation obligations of the employer, which are just some of the legal obligations of an employer which are dependent on the nature of the relationship between the employer and person.
- TFN Withholding for closely held trusts – Given the lack of clarity among the profession concerning the compliance obligations to be met in relation to closely held trusts, the Professional Associations submitted an item for discussion requesting further information clarifying the interaction between TFN Reports, Annual TFN Withholding Reports and various other reporting obligations. The ATO advised that comprehensive information concerning these obligations is now available on the ATO website.The ATO has also recently issued guidance in relation to Labels 64A and 65W on the 2012 Trust Tax Return Form. Please refer to 2012 TaxVine No.41 for details about this. A request for information to provide clarity around Label 65S in the 2012 Trust Tax Return Form was also made by The Tax Institute.
- Pre-issue Compliance Strategy – The ATO provided members with a brief overview of the pre-issue compliance strategy (ie refund integrity checks) put in place for Tax Time 2012.
- Cash economy update – The Professional Associations submitted an item for discussion in relation to issues impacting the cash economy, one being in relation to correspondence issued by the ATO about applying benchmarks and the other in relation to guidance the ATO has issued to tax practitioners concerning record keeping and cash transactions. As a result of the discussions, the ATO will review and amend the guidance it has issued to tax practitioners.
- Tax Crime and the ATO Compliance Program – The ATO provided members with an overview of the areas of the ATO Compliance Program which focus on tax crime, which is an issue the ATO is currently focusing on. These areas include refund fraud, organised crime and tax avoidance arrangements.
- Business Income Tax Return Review – The ATO advised that the rationalisation of Business Income Tax Returns and associated Schedules is progressing. For 2013, the changes will include several labels being removed from tax return schedules, the Capital Allowance and Personal Services Income schedules being decommissioned and the Capital Gains Tax schedule being shortened
- Tax Practitioner Research – The ATO provided members with a summary of the findings from the latest Tax Practitioner survey. The ATO is also in the process of revising the ATO Research Program for next year (which includes market perception surveys) and is consulting with members on the redesign of the Tax Practitioner survey.
- Changes to paper lodgment channel for individual self-preparers – The ATO provided members with an update in relation to the changes being made to the availability of paper lodgment of tax returns for individual self-preparers.
- Indirect Tax Strategy, Risk and Intelligence for Fuel Tax Credits and Egregious Tax Agents – The ATO provided members with information regarding work the ATO is doing to improve compliance with the fuel tax credit scheme by egregious tax agents.
Members requiring any further information in relation to any of the above items should contact us at Tax Policy.