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09 Mar 12 More on direct client contact by ATO

Following Member 30's feedback about the ATO ignoring designated postal addresses in last week's TAXVINE - see 2012 TAXVINE No 6 (2 March 2012) - MEMBER 36 writes:

"Why does the ATO continue to want to directly contact taxpayers who have appointed a tax AGENT to ask them questions that their tax AGENT should have already discussed with them?

Why not contact the tax AGENT instead? I can't understand how the direct contact with taxpayers by the ATO is an efficient use of limited government funds. How many times are the ATO officers going to hear the answer 'Please speak to my appointed AGENT' (or something similar but much ruder!)?

The latest example of the ongoing desire to directly communicate with the clients of tax agents is in the ATO eLink for tax professionals, Issue No 08/12, dated 29 February 2012. It reads (in part) as follows:

'In the coming weeks we will be phoning some of your small-to-medium enterprise (SME) clients, who have generated for the first time, a tax loss in the 2009-10 income year...'???"

MEMBER 37 writes:

"When is this insanity going to stop?

I refer to ATO eLink for tax professionals, Issue No 08/12, dated 29 February 2012 which reads, in part, as follows:

'In the coming weeks we will be phoning some of your small-to-medium enterprise (SME) clients, who have generated for the first time, a tax loss in the 2009-10 income year...'

Why is the ATO contacting clients direct? - we are appointed as their tax agents to deal with their tax affairs. Doesn't the ATO think that we advise our clients on the requirements in respect to C/Fwd losses? As the client's tax agents and accountants we have to ensure that they comply with the tax loss rules - that's why they use us.

The clients do not need more ATO fear put into them, nor do the taxpayers of Australia need to have more of their money wasted by this bureaucratic fiend doing more useless projects. They'd be better off spending taxpayers' money sorting out their internal systems that cause all who deal with them so much grief.

The ATO should not be contacting taxpayers direct where the taxpayers have a tax agent unless absolute extenuating circumstances or proven default by the tax agent.

The Tax Institute - please do something on behalf of your members and the Australian community to put this out of control monster to rest."

MEMBER 38 writes:

"In response to last week's TAXVINE, the ATO does not only send letters regarding Level 6 Tax Returns to clients residential address instead of Postal Address but also any letters that they see as "important" enough that the client should see - without the Tax Agent becoming involved. They send out PAYG Payment Summaries at year end, letters about Superannuation Audits, even a letter to a client of mine stating that they were going to do a telephone interview about their employees and contractors - all sent to clients residential address rather than Postal address.

Now I live in a country area and my client's residential address is hardly ever the same as their postal address and frequently this mail gets lost or at best delayed in being received. I know that some agents would prefer that their clients receive such letters directly rather than through the tax agent. I have always through ELS requested all correspondence to be sent directly to me but this is always ignored when the ATO wish. I told this client to never ever answer questions over the phone - one they could inadvertently say the wrong thing or two - this person who says they are from the ATO could be anyone!! So much for ATO security!!

No, they don't trust us to forward details of such letters to our clients. I would rather receive such letters myself rather than have my clients stress out when they receive such letters from the ATO. Let's face it, most individuals when receiving any letters from the ATO do stress out. This is usually needless worry for them. Why can't the ATO send letters to our clients Postal Address? Then we can decide what our clients need to see and what is just trash. This would save us a lot of time having to pacify overwrought clients. As the member in last week's TAXVINE stated, why are we called Agents when the ATO does not recognise us as such????"

MEMBER 39 writes:

"In last week's TAXVINE, Member 30 raised an issue concerning the ATO ignoring postal addresses and The Tax Institute comment indicates past actions by ATO for a particular level of taxpayer justifies the ATO action...This problem of the ATO going direct to the taxpayer whenever they like has existed for many years. It is time The Tax Institute stood up and insisted on the tax agent system be honoured by the ATO and all their communications be firstly through the tax agent.

Further, Members 32 and 33 raise issues which The Tax Institute indicates the ATO is working on. Why is The Tax Institute not demanding time limits on resolving these issues? The ATO is very good at putting unrealistic time limits on their demands, particularly when the gap between the date of their demand can be up to 7 days before the receipt of that demand.

It seems to me that The Tax Institute is not aggressive enough and you are being trampled over."

THE TAX INSTITUTE'S TAX COUNSEL, STEPHANIE CAREDES, COMMENTS: "There are instances where the ATO specifically targets communications to taxpayers directly and there are other instances where the ATO sends communications to the address for service noted in the taxpayer's record with the ATO. The Tax Institute is aware of certain circumstances where correspondence has purposely been sent to the taxpayer and not the tax agent, for example in the case of "Tax Level 6 Return Taxpayers" as noted in 2012 TaxVine No.6 in response to Member 30's comments.

In some cases, the taxpayer's address for service is noted as their own address and not the address of their tax agent and as such, communications that are intended to be sent to a tax agent are inadvertently sent to the client. The Tax Institute would encourage members to review their client's details as advised to the ATO where they feel that correspondence should have been received by the agent and not their client. This may assist to remedy this issue in the cases where correspondence has inadvertently been sent to the client.

With Member 30's consent, The Tax Institute has raised this issue directly with the ATO. The Tax Institute offers to all members to assist with any queries they may have in relation to correspondence not being sent to the correct address for service once the member has confirmed that the correct address for service has been included on their client's account and has not been adhered to in a particular circumstance. Please send all your queries to TaxPolicy."

MEMBER 40 writes:

"I had just finished cheering Member 30's letter concerning the ATO writing directly to clients about 31 March lodgments and then I opened this week's ATO elink and noticed that we have another demonstration of the ATO's true regard for Tax Agents. This time it is the proposal to make telephone calls direct to SME business owners to discuss losses that they have incurred to help them (the ATO) understand why and provide them (the business owner) with guidance to ensure they understand their tax obligations.

This is getting ridiculous. The ATO seems to have forgotten who their 'client' is the Agent not the business owner. Why do they persist in these confrontational and intimidatory practices, about which I have not seen any positive results reported (unless of course upsetting taxpayers and Agents is the goal). Most people react with trepidation if someone contacts them from the ATO, and have appointed someone to act on their behalf as Agent. The major concerns I have are clients not being advised they are able to involve their Agent in this process, proof of identity and identity theft possibilities associated with cold calls and, on a technical front, that the ATO staff...making these calls probably have not had any experience in running a business and have had a few weeks training on the ATO's view of tax law concerning losses (and their rampant abuse by taxpayers).

I have had over 30 years in practice and still regularly get the books out to work through the complications associated with losses, for example, continuity of ownership & same business tests, Family Trust Elections, etc etc. It is not a simple topic and I will be ensuring my clients contact me before discussing their private affairs with someone identifying themselves as an ATO representative on the end of the phone.

In my professional opinion it is not the ATO's role to circumvent the relationship between a taxpayer and their Agent. If they have concerns about an issue they should first contact the Agent, if the Agent is not acting professionally or ethically then it is the Agent that should be dealt with."

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