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30 Sep 1111 TOFA compliance project consultation update

On Tuesday 27 September, Tax Counsel Tamera Lang ATIA and Tony Frost FTIA (Greenwoods & Freehills) attended a follow-up discussion with the ATO regarding their TOFA compliance project. As reported in TaxVine # 36, the ATO has engaged with the Professional Bodies to discuss a draft "TOFA implementation" questionnaire that the ATO intends to use as part of their compliance activities. The objective of the questionnaire is to review taxpayers' compliance with the TOFA rules in the implementation phase, and to monitor the extent to which the objectives of the TOFA rules are being met.

In the first round of consultation, the Professional Bodies expressed concern that the draft questionnaire required very detailed information on a multitude of financial arrangements, and would be too onerous for taxpayers and their advisers to complete. The ATO has responded to some of the concerns, by removing some of the detail from the questions and putting more focus on governance issues.

Even though changes have been made to the draft, The Tax Institute remains very concerned about the onerous nature of the questionnaire. Whilst the individual questions may be reasonable, we consider that when taken as an aggregate they are too burdensome. We are concerned that the master questionnaire that has been developed will not be appropriately tailored to taxpayers' individual circumstances.

We will be responding to the latest round of consultation with a letter to the ATO setting out our concerns and urging them to reconsider the tone and direction of their TOFA compliance project. Whilst TOFA compliance reviews will, quite reasonably, become a fact of life for many taxpayers, reviews should be conducted in a way that respects the self-assessment system. If you would like to contribute to our advocacy on this project, please contact us at TaxPolicy.

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