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16 Mar 1212 On SATO and income discrepancies

MEMBER 47 writes:

"When are the ATO going to stop unnecessarily amending tax returns for senior Australians who are well under the SATO threshold and haven't lodged formal tax returns because of it.

We have a taxpayer (and he isn't the first I have seen) who in 2009 had interest income of $20,000 and dividend income of $160 which is well under the SATO threshold. We lodged a refund of imputation credits application and a refund notice issued on 7/9/09. In July 2011 he received an income discrepancy report saying that he has not declared $20,000 in interest income and they are going to amend. We call and write to them advising that SATO applies to the taxpayer and thus, no tax will result, however they refuse to include the SATO and amend it anyway and this amendment is issued on 22/8/11. We subsequently do a further amendment in writing (can't do an electronic one) and get this signed by the taxpayer, but with the time lags involved, it doesn't arrive at the ATO until 21/9/11. This is of course more than 2 years after the original 'assessment' and they say they can't amend!

The next step is to object against the assessment and we are still waiting on a reply. In the meantime they say he has to pay the $1,500 odd worth of tax which should never have applied in the first place!

This is totally ridiculous. Why don't the ATO look at things like SATO before issuing these income discrepancies or at least allow us to advise them in order to stop an amendment from occurring in the first place? We should not need to amend a return again to put this in.

The ATO's own website says that you don't have to lodge a return if your income is below the SATO threshold and you meet all the other criteria. Can't the computer look at the date of birth and give the taxpayer the chance to at least reply/explain before amending?

I have seen this not only with SATO, but other tax offsets such as superannuation income streams as well. It is time the ATO improve their systems and stop wasting everyone's time."

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