More on requests for amendment and the two or four year time limit – a happy outcome
20 Mar 2015
In 2015 TAXVINE Issue 6 (27 February 2015) Member 28 wrote:
“I read with great interest (pardon the pun as you’ll soon see) the story post by Member 18 in 2015 TAXVINE No 4 (13 February 2015) and the ATO’s response in 2015 TAXVINE No 5 (20 February 2015). In that story, Member 18 received a letter from the ATO seeking to increase the taxable income for a client due to omitted interest.
Member 18 pointed out to the ATO they were outside the two year period but the ATO countered with ‘It’s not interest, it’s a Trust Distribution so we have four years to amend, not two’.
It might interest you to hear my story which is the exact mirror image opposite to that story. We picked up a new client and noted a number of errors in her return. We requested by letter that her taxable income be reduced for a number of years of income and received a standard from the ATO letter informing us we were outside the two year amendment period. Trouble was my client had capital gains in her returns as well as, and wait for it, trust distributions from listed Australian trusts…Irony anyone?
We contacted the ATO who told us to object against the letter. Their letter was dated 10 June 2014 and our objection on the Portal was dated 24 July 2014. Nothing happened for months. The usual stories that we tax practitioners cannot seem to get a response to our correspondence within a reasonable time and end up having to complain. We chased the ATO again this week and their response beggars belief. Apparently someone from the ATO placed a ‘done’ code on the matter and that’s that. It’s closed and cannot be reopened. We now have re-start the whole process by writing another letter asking them to look at the matters raised in our first letter. Even if the ‘done’ code was placed on the matter, where is my letter telling me this? And apparently the letter of rejection we received telling us we are a shorter period of review taxpayer is a standard letter – no one actually checks the contents of the return to verify this!
It seems to me the ATO system is being manipulated and used for individual circumstances rather than administering the law fairly for everyone. If interest is a Trust Distribution for Member 18’s client and the ATO have the right to amend outside the two year period, why does my client get a letter of rejection when clearly she receives trust distributions from listed trusts. And how does the ATO issue letters without checking their facts first?
I look forward to being contacted by the ATO on this matter and look forward to the ATO Response in TAXVINE. Really, really poor form ATO.”
MEMBER 28 NOW REPORTS:
“You published my story and there has been an update:
Credit where credit is due, ATO. Not long after my story was published in TaxVine I received a call that the ATO had read my story and were interested to know more. I spoke to a lovely lady, gave her all the details and THE SAME DAY she called me back to tell me the returns had been amended and to watch out for the amended assessments. Credit where credit is due, thank you, ATO. The deceased estate can now be finalised.”