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07 Oct 11 More on pre-assessment reviews

MEMBER 182 writes

"And further on a previous comment:

One ASX listed (so not a small fish) company has a significant number of employees now receiving their pre-assessment review letters requiring disclosure or the ATO will adjust their lodged return to remove what they feel to be excessive claims.

A senior executive has confirmed to a colleague that the ATO state they have not received the PAYG Summary information for this listed company (the main entity with a significant payroll) but rather than going to the company, have instead pulled out returns where the PAYGW or refund is "too high".

This listed company is resending the information to the ATO today (Thursday) but they have been advised this will NOT resolve the pre-assessment reviews.

The latest letter I saw had a gross income of about $50,000, tax withheld of about $8,000 (extra tax deducted), a $466 Union fee and a partial spouse offset - all legitimate and supportable by just 2 documents, his PAYG Summary and his partner's PAYG Summary for about $2,000 of casual work.

Just utter madness. This has delayed a significant number of tax refunds, and also Centrelink benefit entitlements as well.

At least it has happened to quite a number of employees so it is apparent it is an ATO problem not us as an accounting firm.

So much for the statistics they are proudly flaunting. I would like to see The Tax Institute identify the final amount of fraudulent refunds that DO get stopped by the ATO in another few months and compare that to the headlined amounts they proudly raised in their public statements and press releases."

THE TAX INSTITUTE'S TAX COUNSEL TAMERA LANG COMMENTS:

"The Tax Institute has asked the ATO to tell us about the outcomes of the pre-assessment review process. For example, we are interested to hear how many delayed returns resulted in adjustments (and the value of the adjustments), the ratio of agent to self-prepared returns, and the main sources/reasons for adjustments, amongst other things. A detailed list of questions has been submitted via the ATO Tax Practitioners Forum, and we will keep members informed of the outcomes in future editions of TAXVINE."


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