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09 Sep 11 TaxTime and pre-assessment reviews update

Tax Counsel Tamera Lang ATIA participated in the ATO Tax Practitioner Forum (ATPF) TaxTime Working Group teleconference on Wednesday 7 September  2011.

As has been the case throughout the TaxTime season thus far, the ATO reported no problems with the processing of returns and refunds. This correlates to the lack of negative feedback that we have received from members. The ATO is expecting to see another peak in lodgements as the 31 October deadline for self-preparers looms.

The hot issue for many Tax Institute members has been returns that have been caught up in “refund integrity checks”. Many members have contacted us following the receipt of a letter saying that their client/s’ refunds will be delayed by 12 weeks, due to possible fraud or over-stated claims. Members have been very concerned about the lack of information about why the return is subject to a pre-assessment review, and what action can be taken to satisfy the ATO’s queries.

We are pleased that the ATO has responded to our members’ concerns by providing us with more information. The detail is set out in the official ATO message below. The ATO has commenced a program of contacting affected taxpayers and agents to request substantiation of claims that have been made. The program will be progressively rolled out, so agents can expect to start receiving letters as soon as next week. The Professional Bodies have assisted the ATO in refining their communication materials, with the aim of making them clearer and easier for agents to comply.  If members have queries or feedback on the content of the letters, they are encouraged to contact us at Tax Policy.

A number of members have reported that when they have contacted the ATO about refund integrity checks, they have received no useful information from the call centres. The ATO is addressing this issue by putting in place a dedicated phone number to deal with agent queries. The calls will be answered by staff who have particular knowledge of the program, and they should be in a better position to assist agents. The Tax Institute is interested in hearing feedback from members about the level of service they receive from the special call centre.

At the conclusion of the teleconference, the Professional Bodies agreed that it was appropriate to cease the fortnightly TaxTime Working Group meetings. There have been no major issues, nor any anticipated, and thus we will only meet on an as-needed basis going forward. Whilst the formal teleconferences will cease, The Tax Institute will continue to closely monitor TaxTime processing through our member feedback, and we will raise any issues with the ATO as they arise.

Members will recall that one of the Inspector General of Taxation’s recommendations from the Change Program review was that the ATO communicate transparently through appropriate mediums about major software releases, including TaxTime. The TaxTime Working Group has been a very valuable forum for The Tax Institute to raise our members’ concerns, and to obtain information on the processing of returns. We hope that the ATO’s engagement with us will proceed in a similar fashion for TaxTime next year, or any other major software deployment. 

Following the Working Group teleconference, the ATO would like to pass on the following message:

Processing
•    The processing of current year returns and issuing of refunds continues as expected
•    Since 1 July 2011 we have issued 4.5m refunds for all year returns, totalling approximately $12b
•    The latest processing figures will be available in ATO Progress Report 9

Calls
•    ATO service levels are being met
•    Since 1 July 2011 the ATO has answered approximately 2.5 million calls with about 230,000 coming through the Registered Agent line
•    94% of all Registered Agent calls since 1 July 2011 have been answered inside 2 minutes against our service standard of 90% and 99.9 % of these calls have been answered within 5 minutes
•    The average wait time in recent weeks for Registered Agent calls has been less than 30 seconds
•    The maximum wait time last week was 14 minutes for one caller

Of concern
•    The ATO continues to identify returns containing potentially fraudulent or over-stated claims and has now stopped 70,000 returns since 1 July 2011
•    56,000 remain on hand and are at different stages of review
•    ATPF member feedback has been considered as part of a review of correspondence and procedures used by the ATO in addressing these returns taken off line for as much as 12 weeks
•    A bulk mail out to 4,000 tax agent clients will commence on Thursday 8 September. With a maximum of 15 letters per agent, approximately 1,800 registered tax agents will be involved.
•    A dedicated phone number resourced by Micro Enterprises and Individuals client contact staff will receive followup calls
•    A similar number of reviews are expected to then issue on a weekly basis - with numbers increasing as capacity allows
•    A draft of the letter that will be used was provided to members of the ATPF on Friday 2 September. Feedback from the members has been incorporated into the letter.
•    Agents who have had 50 returns or more stopped have been assigned to a compliance manager and will receive a visit. This represents 91 agents
•    36 tax agents have already been contacted and the ATO has discussed the return integrity risks for their practice. This includes field visits and phone calls to agents who have had recent interaction with a compliance manager
•    Contacts with registered tax agents to date have received a positive response, with tax agents appreciating an explanation of the return integrity timetable and processes.

Future
•    Members were thanked for the continuing contribution and support through the series of regular tax time phone hook-ups
•    Members agreed due to the success of Tax Time 2011 that the regular ATPF PHU meetings are no longer necessary, although the group can be reconvened if an issue arises that requires further discussion. A detailed briefing on Tax Time will be provided at the next full ATPF meeting scheduled for 4 November


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