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14 Nov 13 More on the 85% lodgment requirement

MEMBER 250 writes:

"A few days ago I received a letter from the ATO saying that I had some clients with overdue BAS and tax returns and I could be adversely affected regarding the lodgment program if they were not brought up to date.

I find this absolutely amazing. How can tax agents be held responsible for the inaction of their clients, given tax agents have no authority or other direct means of pressuring their clients to complete their returns? The organisation given powers to penalise and prosecute taxpayers for non-lodgement is the ATO. Obviously, the ATO is pressuring tax agents to carry out a job that they are responsible for. It is surprising to me that many tax agents have complained about this issue but no accounting or tax association is willing to tackle the this matter. Are they afraid to upset the ATO? It would be very interesting to see how this would play out in a court of law, where a responsibility has been imposed on a group of people who have no authority to force taxpayers to lodge tax returns. Furthermore, if they do not achieve the required outcomes, they may be penalised.

Finally, tax agents are discouraged to help taxpayers with overdue returns to lodge their returns because the former’s lodgment program could be negatively affected. Even alleged thieves, robbers and murderers are given the right to have appropriate representations, why aren’t taxpayers treated the same way? I believe the professional bodies should be taking this issue much more seriously and putting much more pressure on the tax bureaucracy."

THE TAX INSTITUTE’S TAX COUNSEL, STEPHANIE CAREDES, COMMENTS: “Lodgment performance is measured based on current year lodgments only, not prior year lodgments as well.  A 15% buffer was agreed during the design of the Lodgment Program Framework to be provided for the purpose of catering for tax agents who have clients with returns that have not been lodged on time. Hence the performance level was set at 85%, rather than requiring tax agents to lodge 100% on time.”