ATO's Engagement With Tax Practitioners Reviewed

by Mary Swire, Tax-News.com, Hong Kong

30 May 2014

The Inspector-General of Taxation (IGT) has released the terms of reference for a review into the support offered by the Australian Taxation Office (ATO) to tax practitioners.

IGT Ali Noroozi said: "Tax practitioners play a vital role in the tax system and it is, therefore, important that the ATO-tax practitioner relationship remains positive and cooperative. Despite more recent attempts to improve the ATO's tax practitioner services, concerns persist regarding their adequacy, reliability and functionality."

In 2012-13, more than 8m individual taxpayers and 2m business taxpayers collectively engaged approximately 55,000 registered tax practitioners to help them comply with the tax laws and interact with the ATO on their behalf. The ATO offers support via the Tax and Business Activity Statement Agent Portals, its website and the Registered Agent Phone Line. It also grants concessional lodgement dates and runs consultation forums.

However, ATO surveys have shown that the level of tax practitioner satisfaction with its services has fallen from 72 percent in 2007 to 62 percent in 2012. The ATO developed an action plan in 2012, which aimed at improving its support and engagement.

A number of additional concerns were raised during consultations on the IGT's 2014 Work Program. Stakeholders said that the relationship could be improved if the objective and challenges of each party were fully appreciated by the other, and if practitioners were more involved in the design of the ATO's engagement strategies, services and support.

Submissions pointed out that ATO's services often lacked full functionality and were not sufficiently reliable, resulting in irrecoverable costs. They added that the design and operation of the current lodgement program does not appropriately take into account factors such as work performed on other tax and non-tax related matters, correcting inaccurate ATO information and the delays caused by factors outside practitioners' control.

The IGT's review will focus on:

• The relationship between the ATO and tax practitioners, including each parties' understanding of their respective objectives and challenges;
• The ATO's use and application of the Risk Differential Framework to tax practitioners;
• The adequacy of the ATO's formal and informal engagements;
• The appropriateness of ATO communications with tax practitioners and their clients;
• The functionality, reliability and accessibility of the ATO's tax practitioner services, including the integration of those services with third party software;
• The ATO's plans to improve its tax practitioner services in the future, including the migration of automated regulatory reporting systems, and
• The accuracy of ATO information relied upon and the means to correct that information.

Submissions are due by July 18.