Skip to main content

Your shopping cart is empty

06 Feb 14 On returns for deceased taxpayers

MEMBER 8 writes:

"I have decided to write this diatribe rather than lodging yet another ‘I don’t know’ complaint with the ATO; once written, I shall go back and remove all of the expletives so that it actually gets to print.

I have a client deceased late June 2012. I prepared the 2012 income tax return in the knowledge that an annual leave payment and the last week’s wages were received during the 2013 financial year; I therefore did not prepare 2012 as a final return – silly me...I should have known that one can no longer prepare an individual return after DOD (it used to be three years), and have the estate taxed as an individual. I should have known that I would need to apply for a TFN for a trust estate, and return the <$2k with associated tax credits, as trust income. Unfortunately, amidst the plethora of PR speak that is ATO bulletins, I missed that piece of crucial advice.

So – I lodged a final 2013 individual income tax return (electronically); waited the obligatory 14 days, then 1 month, then 3 months, and finally contacted the ATO to be told that it had ‘cancelled’ the return. No written advice, no phone calls, no emails – zilch nada nought…I was then advised, during one of a number of phone calls with the ATO that a trust return was required;  therefore, we applied for the obligatory TFN, waited for its issue, breathed a sigh of relief when it was issued in a timely manner, and commenced preparation of the return.

Problem – no box in the T return to enable declaration of the income nor claim of refundable credits! Ring the ATO – nobody has been trained in this area of taxation law and/or administration – and I am finally advised by a very polite ATO person to lodge a complaint, as that would expedite resolution.

Finally today, I managed to connect – in response to the complaint; it must have been the complaint, because rather than being on hold for 45 minutes, I was engaged in trivial conversation by at least half a dozen tax officers, all of whom had not been trained in this area of administration, and who kept me waiting on the phone to talk to the next Schultz. The last person spoken to was a specialist in the business taxation area; I put my question : how do I complete this return? She did not know! On hold!

For all of you budding tax agents out there, the official advice is as follows: there is no box that will enable the completion of a trust return; instead, type a narrative in the additional information schedule (hopefully someone will read it), though I’m taking bets that it will be assessed as a $nil return – with no written advice – and no refund of tax credits.

There is an old adage – if it isn’t broken, don’t fix it – the old system re recently deceased taxpayers worked well and was fraught with common sense...why tinker? and if you are going to tinker, make sure that you tick (and include) all of the boxes!"