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16 Aug 2019 Bouquet and brickbat

MEMBER 211 writes: 

Dear Editor, 

Please find below some content for the always interesting TaxVine. 

Our practice has worked hard in achieving our lodgment targets, so I must first give praise where it’s due to the ATO for their reasonable approach this year in granting us extensions for various 2018 returns which have been subject to delays in lodgment for a variety of reasons. We have genuinely appreciated that. 

On the less-than-positive side, we have had two Notices of Assessment come through in the last week where the tax payable has been considerably more than our estimates. In both cases the NOA was issued on the basis that the deductions for concessional superannuation contributions as claimed were denied in full. On contacting the ATO, we were advised that the amounts claimed did not match the amounts shown on the (obviously incomplete) records the ATO had on file from superannuation funds, so the deductions were automatically denied in full as is current ATO policy. This, despite the taxpayers being required to make a specific declaration in the returns that they hold confirmation letters as required. 

On instruction, we then sent copies of the letters of acknowledgement from the superannuation funds to the ATO, and are now awaiting amended NOA’s showing what should have been assessed in the first place. More wasted time; more delays. 

What’s the point of taxpayers even having to make a declaration (at item D12) with respect to holding substantiating documentation if the ATO are routinely going to ignore it anyway if their incomplete records don’t match up? Are we going to have to routinely provide substantiation every time this happens and wait for new assessments? Perhaps even more concerningly, this is surely a complete departure from the principle of self-assessment. Flatly ignoring claims and issuing NOA’s on the basis of a presumption of guilt without even consulting taxpayers flies in the face of how I understand our tax system should be working. I strongly encourage the Tax Institute to advocate on our behalf to the ATO in the appropriate forums to end this concerning new development.

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