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MEMBER 163 writes:

"We have analysed the returns held for review in our office from 1 July onwards and no outrageous issues exist from a fraud aspect - more a lack of information for the ATO machine.

There is a huge bias against the Forestry industry for starters, even though deductions are not large, but refunds are, due in part to work being both seasonal, and some long forced shutdown/stand-downs with no pay or base pay only, no overtime or loadings.

Many as well are from employers whose payment summaries are not visible on the pre-filling report, including one ASX listed timber industry company.

Another group are from a local company that entered voluntary administration at the beginning of July 2011.

So it appears the ATO are withholding refunds in July, when employers are not required to lodge information until 14 August, because there might be a problem. Even where the employee has held the same job for many years, is claiming under $1,000 of deductions, and the amounts are not hugely different between years.

Once again, this is a failed experiment for the majority of cases, it will be interesting to see if any of these returns get adjusted in any way, or just quietly released once Big Brother can't find any holes to pick at?"

MEMBER 164 writes:

"It isn't often that the ATO admits it is fallible (or gives me a laugh) but they have done both in their latest media release (published on 1 September 2011) on their vigilant watch for naughty people -

'The ATO continued to shine a spotlight on tax cheats during tax time: stopping over 70,000 possibly fraudulent refund cheques worth over $220 million since 1 July 2011

It fills me with concern - I have clients suspected of filing fraudulent returns and now the ATO is saying some of its refund cheques are fraudulent as well? Or have the ATO decided that having people on phones who don't have a good grasp of the language is not clever and have transferred them to the section that writes press releases instead?"

MEMBER 165 writes:

"We have today been advised by the Tax Commissioner that he has stopped 'over 70,000 possibly fraudulent refund cheques worth over $220 million since 1 July.' Similar announcements have occurred over recent weeks.

What I would like the ATO to publish is - how many of these 70,000 refunds were fraudulent?

I, like many other members whose clients face the 12 week delay, want the ATO to be completely transparent with its announcements rather than spinning out only half the truth."


"I read with interest that The Tax Institute has advised that the ATO will advise Tax Agents of their clients who receive a pre-assessment 'audit' letter and that they will advise what further information is required to assist.

I thought great now the one client (as per my feedback to The Tax Institute some weeks back) might be able to get her return moved along the 'slow train' of the ATO. I rang the ATO officer requesting whether there was anything that I could do to facilitate this return or if there was anyone I could speak to regarding this. Answer: After now 8 weeks of waiting it appears that they are going to stretch this one out to a minimum of 12 weeks.

I advised the ATO officer about the details provided by The Tax Institute and was told, no I could not contact the case officer and my client would just have to wait. No sympathy at all was shown just a 'I don't care' attitude. I thought that by speaking to the case officer concerned I would suggest that I obtain a letter from this client's employer to state the amount of Income Tax deducted from her wages. (This employer I know very well and happens to have his business just a short stroll from my office.)

It appears that the ATO is just misleading The Tax Institute and they intend to just keep on holding up clients' refunds as and when they feel like it, for as long as they want.

A lesson to be learnt here - never believe the ATO!!!!"


The Tax Institute has been working with the ATO on this issue. A comprehensive report on the current state of play appears in the 'TaxTime and pre-assessment reviews update' section above.

The ATO does not provide specific information on how their refund integrity model operates. However, it is quite apparent that the ATO system compares the amount of PAYG credits claimed by an employee as against the income derived. If the PAYG credits claimed appear to be too high, additional integrity checks, such as comparisons to the information lodged by the employer, will occur. If the PAYG credits claimed are legitimate, and there are no other issues with the return, the refund should be issued without the need for any further information or action from the taxpayer/agent.

The ATO's letter to agents about the 12 week delays states:

'We are using specialist technology to help us identify and review returns which may contain missing and/or incorrect information. Claims outside normal individual or industry ranges will result in all aspects of a person's tax position being reviewed. Last year 71% of these returns were adjusted prior to the notices of assessment issuing.'(emphasis added)

We eagerly await statistics on the current year program.

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