Tax Counsel Tamera Lang ATIA attended the ATPF TaxTime Working Group teleconference on Wednesday 24 August 2011.
TaxTime continues to progress very smoothly in terms of processing and refund turn-around times for most tax returns. This is consistent with the feedback we have been receiving from members. However, there continues to be concerns for returns that are taken “offline” for additional scrutiny as a result of possible over-claims or fraudulent activity (and there approximately 50,000 taxpayers with returns in this situation). As regular TaxVine readers will be aware, The Tax Institute has asked for the ATO to provide more detailed information to affected agents, including:
- explaining precisely why a return has been taken offline;
- detailing what substantiation is required to prove relevant claims; and
- giving detailed time-frames for conducting pre-assessment reviews.
The ATO has listened to a number of our concerns, and as a result, will be providing some more information to affected agents within the next week or so. The letter will provide detail on why the return has been held for review, and what substantiation may be required. However, please note that you will not receive a letter for clients with suspected identity fraud (as such cases require special care). Tax agents will be able to directly call the ATO teams that are involved in reviewing these returns, which should make getting information easier (as opposed to calling the general tax agent phone number).
Some agents with clients under scrutiny will receive a visit from the ATO, but this is only where they have a very high of clients affected (e.g. around/above 100 clients).
The Tax Institute is continuing to monitor the situation closely. If members are experiencing difficulties with pre-assessment reviews (or indeed with TaxTime generally) please contact us at Tax Policy.
As a result of the Working Group teleconference, the ATO would like to pass on the following message:
The ATO advises that:
- The processing of current year returns and issuing of refunds continues as expected
- The latest processing figures will be available in ATO Progress Report 8 (income tax returns since 1 July 2011)
- ATO service levels are being met.
- The ATO is continuing to identify returns containing potentially fraudulent or over-stated claims.
- In response to concerns raised by members of the ATPF and agents, the ATO is reviewing processes for managing these returns. Under the changes discussed with members of the ATPF;
- the letter advising a review is commencing will be issued to the postal address of the taxpayers, not the residential address
- the letter will advise of the reason for the review and the required substantiation
- calls from agents in receipt of such letters will be directed to compliance officers better able to address agent concerns
- refinements to the letters are also being considered.
- The ATO will be visiting tax agents with higher numbers of returns identified for review