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10 Dec 10 Warning - ATO demanding money to which it is not entitled

MEMBER 369 writes:

"I wish to warn all Members to check Amended Taxation Assessment Notices. I have a client whose 2009 return I did in June 2010 and minutes after lodging this return I remembered that I had not claimed the Medical expense offset so I immediately lodged an amended return. The original notice of assessment arrived in June 2010 and everything was okay except for the $300 odd amount for medical expense offset. In this return my client had $11,000 odd PAYG Payment Instalments credited and the return was for a bill of approx $3,500. When the amended assessment notice arrived it was for a bill of over $11,000 so we presumed that the PAYG instalments had not been paid, as many small businesses are finding it tough to meet their tax obligations.

Client rang the ATO and asked them to explain the bill because he had already paid the $3,500 bill and didn't think he owed anything else. Client was told by ATO to "contact the Tax Agent because they did the amended return and should be able to explain this bill". Client contacted me and I immediately checked the Portal, when I finally could get on it, and found that client had paid all accounts including the PAYG instalments. I had a very irate client who was blaming me for this bill of over $11,000 and who now refused to pay my account. So I contacted the ATO and the officer advised that my client could only be given a credit for the PAYG Instalments once!. I advised him yes that was correct but this was an amended return and therefore the PAYG Instalments should have been credited and the only difference was a credit of $300 odd dollars for the medical expense offset. ATO officer couldn't understand how this could have happened and advised me that the ATO couldn't look into the matter until after the 14/12/2010.

I demanded that the ATO write a letter of apology to my client and advise him that this bill of $11,000+ was not payable and was a result of the ATO stuff up. I advised the ATO officer that if my client received such an apology then hopefully I would not loose him as a client and would get my account paid. The officer said "well I'll apologise to you now" and I thanked him but said that was of no use to my client who the ATO had demanded pay a bill of $11,000+ to which they were not entitled. He advised me where I could write to in the ATO but added that he doubted that I or my client would receive an apology as "the ATO does not apologise"

Needless to say I did write to ATO and am waiting for a reply. Now my client has received a Demand for Payment and I am still left with an irate client, loss of my time in chasing up this MASSIVE error and my account is still not paid. So Members, check and double check all amended assessment notices where PAYG Instalments are involved. The ATO could possibly be getting vast sums to which they are not entitled!"

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