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01 Apr 10 On ATO (mal)administration

MEMBER 75 writes:

"There is definitely something wrong with public tax administration when the following occurs.

Client receives ATO letter dated 12 May 2009 advising of possible excess superannuation contributions for 2008. Client immediately contacts his superannuation fund (a public fund) and it is discovered fund supplied incorrect information to ATO. Fund sent revised information to ATO on 25 June 2009.

Today, 26 March 2010, client received another letter from ATO advising again of possible excess superannuation contributions for 2008. I reviewed my file and after 20 minutes on hold spoke to an ATO officer who confirmed that the ATO had the Fund's revised information of 25 June 2010 but ATO had not yet actioned it - nine months later - and I could ignore the second letter.

Who pays for my half hour of wasted time? If only we were given nine months to reply to the ATO. This is not good tax administration."

MEMBER 76 writes:

"ATO System Failure. An individual received a demand for repayment of their baby bonus, unless they lodged a nil return for their wife for the 2008 financial year by 10 December 2009. The individual lodged this on 9 December 2009. On 24 December 2009 a letter was issued by Dunn and Bradstreet demanding repayment by 15 January 2010.

Despite this issue resulting from the ATO being unable to process the taxpayer's tax return, D&B were unable/unwilling to stop the debt collection process, and the ATO/Family Assistance Office/Centrelink staff also stated that nothing could be done 'unfortunately'. D&B offered to take the 'debt' by instalments.

A notice was received from the FAO last week stating that not only was none of the original benefit repayable, but that an additional $300 would be paid by the FAO shortly. No mention was made of refunding the D&B amount. The Family 'Assistance' Office when asked said I needed to call D&B to chase the refund. I called D&B and they said I needed to call Centrelink. I asked why I needed to call Centrelink since the ATO, FAO and D&B were the only organisations involved in the whole debacle. They said it was a Centrelink debt. I said it wasn’t a debt, it was just a stuff up by the ATO.

They grudgingly gave me Centrelink’s number when I said surely I didn't need to find yet another contact number myself. Centrelink said "yes, your client is owed $2,000". I asked when it would be repaid. They were surprised by this question and said "the department works their way through the refunds, don't know how long it will take, maybe 2 weeks". I couldn't help asking how much interest would be paid on the refund since it was not a real debt. They said there wouldn't be any interest because they don't charge interest on debts so it goes both ways. I hung up at that point to avoid saying something unprofessional.

Then called the ATO to ask whether they had provisioned for interest on overpayments resulting from their system failing. I couldn't help snorting as the automated response firstly hung up on me and then said that they were experiencing high volume and the average wait time was 57 minutes. Hung up again.

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