Monday, 31 March 2014

On the Commissioner’s address at National Convention

Last week the Board of Taxation released some significant papers, including the second Division 7A discussion paper. As practitioners know too well, the private company payments laws in Division 7A have been a bugbear since their inception 16 years ago. The actions by the ATO on unpaid present entitlements owed by trusts to private companies have created controversy and only exacerbated the problems faced in trying to navigate this complex area of law. It will come as no surprise that the Board has found that Division 7A fails in achieving its policy objectives and can be a significant source of compliance costs for businesses.

Is this the final nail in the coffin of Division 7A? With the Federal Government’s deregulation focus, will it see fit to overhaul the laws? The Board has proposed a new model known as the 'Transfer of Value Model' and it is certainly worthy of further examination. The consultation period is six weeks, so we look forward to member input into our analysis.

Also, the Commissioner of Taxation, Chris Jordan AO, announced a new offshore income voluntary disclosure initiative at The Tax Institute’s 29th National Convention in Hobart. This latest voluntary disclosure initiative from the Tax Office is a pragmatic approach to repatriating potentially hundreds of millions of dollars of Australian tax. In an international environment that is lowering the veil of tax secrecy and sharing more information than ever before, the Tax Office is making a strong pitch to taxpayers. At first blush, the initiative appears to be much more generous than its predecessors and has taken into account lessons learned, but the devil will be in the detail.

There are features setting this initiative apart: the ATO won’t go back beyond the standard amendment period, which is usually four years; and it may also agree not to tax taxpayers on the winding up of the offshore structures. These features show a new level of pragmatism on the part of the ATO. However, there are features that taxpayers should be wary of, such as not being entitled to utilise certain losses. Taxpayers should be fully informed about the level of protection on offer before proceeding.

Robert Jeremenko
Robert
Jeremenko
Robert Jeremenko CTA is Senior Tax Counsel of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

And the winners are...

Announcing the winners of the Tax Adviser of the Year Awards

During the Tax Awards dinner at the recent 29th National Convention in Hobart, Tasmania, we were proud to announce the winners of the inaugural Tax Adviser of the Year Awards.

The winners are...

Chartered Tax Adviser of the Year
David Russell, CTA AM RFD QC

Tax Adviser of the Year
Wayne Plummer, ATI, PwC Australia

Emerging Tax Star
Matthew Andruchowycz, CTA, Wallmans Lawyers


Reflecting on what the awards mean to the profession

The Tax Institute received a flood of high calibre nominations in all three categories, making the judges' decision an extremely difficult one. Every nomination represents the capability, dedication, commitment and talent clearly thriving in the Australian tax profession. The large pool of nominees highlights why Australian tax professionals are some of the best in the world.

I would like to take this opportunity to acknowledge all those who entered the awards or nominated someone, and commend you for investing the time to put your applications forward. It is this dedication that made these awards a success and have helped to continue to enhance the tax profession in this country.

If you were unsuccessful this year, I would encourage you to enter again next year. And if you didn't prepare an entry this year, we'll announce the next awards later this year.

The Tax Adviser of the Year Awards 2014 celebrate individual excellent in tax.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Friday, 28 March 2014

The Tax Institute’s role in the debate about high-level tax reform

Following on from last week, our constitution’s objects include the following:
“(a) [to] advance public knowledge and understanding of Taxation Laws, the practices of public authorities administering Taxation Laws and the attitude of Governments to Taxation Laws;

(d) encourage research into the reform of any Taxation Law …”
These objects are sufficiently broad to allow the Institute to contribute to debate about tax reform, and indeed contemplate that the Institute will contribute in some form or other to reforming the tax system. In addition, The Tax Institute has a long history of contributing to debate about tax reform (see, for example, Ken Spence’s President’s Report in the April 1998 issue of this journal, in which he committed the Institute to playing an important role in the tax reform process). My predecessor Steve Westaway also voiced the Institute’s concerns that the government was not following through on reforms recommended by the Henry Review.

Because of our historical involvement in tax reform debates and our position as the leading association for tax professionals, I think that most of our members (as well as the government and the ATO) expect The Tax Institute to contribute ideas and criticisms on tax reform.

I accept that we need to be careful about commenting about areas beyond our primary areas of expertise, but I think we would be letting down our members and the Australian public if we failed to advocate for reforms that we believe would benefit the Australian tax system.

Because we are often requested to provide submissions or comment on tax reforms within a short timeframe, the responsibility for formulating The Tax Institute’s position often falls on myself, the vice-president and the Tax Policy team. Our Tax Policy team has formulated a set of principles that guide them in preparing submissions and responding to requests for comment from the media. The full set of principles is only two pages long and can be found on the Institute’s website (website to come), but in summary the principles provide that any tax reform should promote a more efficient, equitable and simple tax system.

Where an immediate response is not required, The Tax Institute’s position is formulated after consulting our technical committees. We are currently revamping our technical committee structure to provide more opportunities for members to participate in preparing submissions. It is intended that the Institute will have a number of specialist committees (large business, GST, dispute resolution, superannuation, FBT and not-for-profit), as well as a generalist Technical Resource Committee. The Technical Resource Committee will cover any issues not covered by the specialist committees, particularly SME and tax practitioner issues, but will also be given the opportunity to contribute to the submissions being prepared by the specialist committees and will be comprised of the state-based technical committees. If you are interested in joining one of our technical committees, please do not hesitate to contact your state manager or the Tax Policy team.

The new government will be issuing a White Paper on tax reform later this year, so I expect the tax reform debate to reignite. The Tax Institute is committed to advocating reforms that promote our tax reform principles.

Michael Flynn CTA is President of the National Council at The Tax Institute.

The Tax Institute is 
Australia's leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Wednesday, 26 March 2014

February's free member tax presentations

Here’s a selection of presentations from our leading events series.

Members of The Tax Institute can access these presentations for free by clicking the links below (make sure you’re logged in to our website first). Non-members can purchase the presentations for only $12 each.

Many presentations have a related technical paper, which can also be found on the presentation’s page. Don’t forget, a Tax Knowledge eXchange subscription gives you unlimited access to these papers, presentations, articles from our journals, and much more.


Tax Knowledge eXchange
The Tax Institute runs over 300 CPD seminars a year, and all papers and PowerPoint presentations provided by the speakers from our seminars are available through the website individually or through a Tax Knowledge eXchange subscription.

Monday, 24 March 2014

Kick-starting the tax reform debate

Last week the Federal Government introduced the first tranche of red tape repeal bills.

This move to reduce duplication and complexity is a welcome step in reducing unnecessary red tape in the economy. However, whilst removing redundant laws is an important part of simplifying the country’s statute books, a crucial aspect of the deregulation equation is addressing the need for wholesale tax reform.

Tax reform is essential to reducing overlap and complexity and moving towards a simple, fair and efficient tax system, and the Federal Government’s much anticipated Tax Reform White Paper is key to kick-starting the tax reform debate.

To ensure that Australia is well positioned for the challenges of the decades ahead, we must work on a tax reform plan now for implementation in the coming years when our budgetary position improves. The benefits of tax reform will flow to all Australians in the form of a stronger economy.

We look forward to the Government setting a clear timetable for the Tax Reform White Paper as soon as possible.

In our recent Federal Budget submission, we called for reform of the taxation of trusts to be dealt with as part of the Tax Reform White Paper.  Reform of State taxes, such as stamp duties, to create a more efficient tax system while boosting investment and growth should also be addressed as part of this process.

Reform of the rules governing the taxation of trusts is essential to provide certainty to the thousands of taxpayers that use trusts, reduce compliance costs and prevent outcomes that are inconsistent with the policy intent.

By taking a leadership position on State tax reform, the Government has an opportunity to bring the States on board with a unified vision for tax reform in Australia. Potentially, this could lead to a greater role for consumption taxes such as the GST and replacing inefficient and complicated State taxes such as conveyance duties and insurance duties.

Robert Jeremenko
Robert
Jeremenko
Robert Jeremenko CTA is Senior Tax Counsel of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Friday, 21 March 2014

New ways to get your structured and unstructured CPD hours

Taxation in Australia – now in eBook format

Following the success of our iPad app and digital editions, we’re pleased to announce that Taxation in Australia is now also available in eBook edition for Kindle and other eReader device users. Find out more and download your eBook copy from our website.

New title: The Tax Adviser’s Guide to Part IVA

We’re very excited to announce the publication of our brand new title: The Tax Adviser’s Guide to Part IVA. A practical guide to the application of the general anti-avoidance rule, this new title from Greg Travers, CTA, helps you navigate the rules to determine whether Pt IVA may apply to an arrangement that your client has entered into, or is considering entering into. Visit our website to find out more, and if you’re heading to Hobart for our National Convention, don’t miss a special Q&A session with Greg.

Now enrolling for all education programs

We have received a great response regarding the first intake for our Chartered Tax Adviser Program courses — CTA1 Foundations, CTA2 Advanced and CTA3 Advisory. You and your staff can enrol now in these practical and relevant courses for study period 2 2014.

And, underpin your tax skills with education in the areas of Australian legal systems, entities and business structures, and property law with all three units of the Course in Commercial Law available for a second time.

Are you on track with your 2014 CPD requirements?

Now that you’re settled in back at work, it’s time to make a commitment to your continued professional development. Whether you prefer to get your tax updates face-to-face or online in the form of webinars, The Tax Institute has a wide offering that is designed to suit the needs of every tax professional, from webinars giving you one CPD hour to multi-day events offering up to15 hours.

Noel Rowland
Noel
Rowland
Noel Rowland is Chief Executive Officer of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Wednesday, 19 March 2014

Meet a member: Mark King, CTA and SMSF specialist

“Keep on top of the tax law, think about your clients and how they might benefit from changes or new ideas and attain your formal education goals.”

Mark C King, CTA
Name: Mark C King, CTA
Company: Financial Index Wealth Accountants
State: ACT
Member since: 2009

Areas of specialty

Broadly, SMSFs, small business advisory and individual taxation. I have developed a subspecialty for tracking investments for SMSF or investment portfolios. This involves maintaining cost-base records, and income and valuation tracking. We do this electronically and are always looking at updating the e capabilities of our information-gathering systems. This specialty grew from watching my own investments and needing to be on top of the tax issues associated with corporate restructures, deferred income distributions etc.

Why are you a member of The Tax Institute?

The Tax Institute has provided me with the framework to gain a deeper depth of understanding of tax law and tax practice. This was demonstrated to me when I was a member of a national association of Chartered Accounting firms and I see it as increasing in importance in my new role of establishing the tax practice business line with Financial Index Wealth Accountants.

How is your membership beneficial to your practice and clients?

I find that the accuracy and authority of Tax Institute publications, journals and updates give me a level of understanding of contemporary taxation issues that increases my confidence to deal with the issues in practice. I use the electronic publications as reference sources, especially when advising on the small business entity CGT concessions. It is important to be confident with the advice you are giving, but just as important to identify any risks and to ensure that your client is comfortable with the level of risk involved. I think this is where the depth of knowledge available through Tax Institute sources helps most — all facets of the tax argument are explored and the practitioner can settle on an informed position.

How did you end up in tax?

My initial career was as a navigator in the Royal Australian Air Force. I was always comfortable dealing with numbers, and accounting seemed like a natural progression when it was time for a change. I often say “navigation was all about numbers under pressure and so is accounting”. The taxation side is the interesting and challenging side of the accounting profession. Moreover, everyone you meet needs taxation advice!

What are the challenges for tax practitioners this year?

I’m not sure that the challenges change much from year to year. The newly elected government has put a brake on the rate of change, at least temporarily, by suspending action on a number of proposed legislative changes. The economy remains reasonably flat in the ACT, so the challenge this year will be around delivering value for money for our clients.

Most memorable career moment to date

You always remember the “extreme” reactions of your clients. They can be reacting to good or bad news. I’ve had a few great reactions when I’ve worked through a business disposal and have been able to advise my client that there will be no tax to pay on the significant capital gain.

How do you relax?

I enjoy watching the Brumbies at Canberra Stadium and the Wallabies on TV. For a more active pursuit, I enjoy snow skiing.

Advice to those entering the profession

Study. No one wants to deal with an uninformed or lazy practitioner. Keep on top of the tax law, think about your clients and how they might benefit from changes or new ideas and attain your formal education goals. Learning never stops.

The Tax Institute
The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Monday, 17 March 2014

Update on the National Tax Liaison Group

On Wednesday 5 March 2014, our President Michael Flynn CTA, Vice-President Stephen Healey CTA and Senior Tax Counsel Robert Jeremenko CTA attended the ATO’s National Tax Liaison Group meeting.

Being the peak consultative forum of the ATO involving senior representation from both the ATO and Treasury, it is the forum where matters of strategic importance to the taxation system are considered.

At this meeting, a variety of strategic and policy-related issues were discussed, including:

  • Progress of Treasury’s work program resulting from the un-enacted measures list that was issued late last year;
  • Treasury and ATO activities in relation to G20/OECD/BEPS matters;
  • Strategic matters including an update on the Tax White Paper process and the Government’s deregulation initiative;
  • Recent internal reorganisation of business lines within the ATO;
  • The new Business and Industry Expertise register; and
  • ATO practices following the decision in Macquarie Bank Limited v Commissioner of Taxation [2013] FCAFC 119.

The minutes from this meeting should be available on the ATO website in the coming weeks.

The Tax Institute
Stephanie Caredes, CTA is Tax Counsel of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Friday, 14 March 2014

Terms of engagement

This month, our president Michael Flynn discusses the Institute’s engagement with stakeholders, including the government and, more importantly, our members.

The Tax Institute regularly provides submissions to the ATO and to the government about tax laws and the tax system. Our main strength lies in our members’ practical experience of the implementation of tax laws. But we are also invited to make submissions to the government in relation to high-level reforms of the tax system.

One issue that has been raised with me recently by two of our members is whether the Institute should make submissions on tax reform issues that lie outside our primary areas of expertise. The argument against making such submissions is that, to be meaningful, the submissions need to consider the benefits of the proposed law changes for particular groups of taxpayers, the cost to the Budget of giving up tax revenue, and other macroeconomic consequences that lie beyond The Tax Institute’s field of expertise. If the Institute’s submissions fail to consider these issues, we risk harming our credibility. The argument in favour of providing submissions on high-level tax reforms is that, although we may not be able to provide economic analysis, we can still suggest alternative pathways to reform and highlight advantages and disadvantages that are within our expertise to identify.

A related issue is that, on occasion, we may conclude that a particular measure that is opposed by some of our members would improve the tax system. The most memorable example was The Tax Institute’s support many years ago for a proposal to dispense with tax returns for individuals with simple affairs. At the time, this prompted some consternation from a number of members whose practices depended on the preparation of paper tax returns. It now appears likely that the government will remove the requirement for individuals with simple affairs to lodge any return.

The ATO is currently consulting with the tax profession about how to move towards a “low touch/no touch” tax system for individual taxpayers, particularly for those with simpler income tax affairs. The Institute is participating in that consultation. I do not anticipate that there will be any consternation from our members — in the age of mobiles, apps and electronic funds payment, the proposed changes are inevitable.

Nevertheless, the question remains: what role does The Tax Institute play in the debate about high-level tax reform?

Find out in my next post.

Michael Flynn CTA is President of the National Council at The Tax Institute.

The Tax Institute is 
Australia's leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Wednesday, 12 March 2014

Announcing the finalists of the Tax Adviser of the Year Awards

For 70 years, The Tax Institute has been committed to showwcasing the tax profession's leading experts and rising stars.

Continuing this commitment are the inaugural Tax Adviser of the Year Awards, designed to showcase the individual achievements of the best and brightest tax practitioners, and help to strengthen and support the tax profession in Australia through the sharing of success stories and lessons learned from our finalists and winners.

We are excited to reveal to you below the finalists, chosen by a panel of highly respected expert judges:

Emerging Tax Star finalists are:

  • Matthew Andruchowycz, CTA, Wallmans Lawyers
  • Elissa Romanin, Minter Ellison Lawyers
  • Reuben Bramanathan, CTA, McCullough Robertson

Tax Adviser of the Year finalists are:

  • Wayne Plummer, ATI, PwC Australia
  • Lynn Kelly, CTA, Commonwealth Bank of Australia 
  • Greg Travers, CTA, William Buck Sydney

Chartered Tax Adviser finalists are:

  • David Russell, CTA (Life), Wentworth Chambers
  • Andrew Mills, CTA (Life), Australian Tax Office 
  • Sheena Kay, CTA, KPMG

Later this month we will announce the winners of the inaugural Tax Adviser of the Year Awards at the 29th National Convention in Hobart.

Noel Rowland
Noel
Rowland
Noel Rowland is Chief Executive Officer of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Monday, 10 March 2014

The Tax Institute’s priorities for the Federal Budget

The Tax Institute’s priorities for the Federal Budget of 2014-15 include priority areas of the tax law that are in need of urgent and significant reform.

We continue to advocate for a sustained commitment to tax reform for the benefit of all Australians. This requires a measured and structured approach to reform, including a timeline and a process for advancing priority issues.

Australia’s tax and transfer system must strive to be efficient, equitable and simple. The system should encourage savings and investment as well as greater workforce participation. The revenues generated by the system should be sufficient to meet public and social needs, in turn supporting economic growth. In addition, it is important that the superannuation system provides Australians with access to a minimum standard of living in retirement.

The Tax Institute has formulated a set of Tax Policy Principles that serve to guide thinking about Australia’s tax system and possible reforms.

Our priorities for the 2014-15 Federal Budget include:

Building on the Henry Review platform and proceeding with Tax Reform White Paper

The Tax Institute supports ongoing analysis of potential reforms to Australia’s tax system, which are consistent with the Henry Review platform. We welcome the announced Tax Reform White Paper consultation in the second half of calendar year 2014 and look forward to the Government setting a timetable for this consultation as soon as possible.

State tax reform

The Tax Institute urges the Government to take a leadership position on State tax reform and bring the States on board with a unified vision for tax reform in Australia. This would include increasing Australia’s reliance on consumption taxes (such as the GST) and abolishing inefficient and complicated State taxes (such as conveyance duties and insurance duties). The Government should consider the impact of such reforms on taxpayers in lower income tax brackets to ensure that such taxpayers do not suffer undue adverse consequences.

Company tax reform

The Tax Institute supports reducing the company tax rate in the medium term from its current 30% to the 25% recommended by the Henry Review. The Government’s announced 1.5% reduction for the year ended 30 June 2016 is a step in the right direction, however The Tax Institute would encourage the Government to immediately proceed to a 2% reduction. Any such reduction should not be completely negated by a levy on some companies to support the Paid Parental Leave Scheme.

Multinational taxation

The Tax Institute welcomes the Government’s commitment to addressing base erosion and profit shifting (BEPS) in conjunction with Australia’s G20 partners through its endorsement of the OECD action plan on BEPS in July 2013. We support implementation of measures consistent with the OECD recommendations on BEPS, which are due to be released in September 2014, to ensure that multinational companies pay tax in the country where revenue is earned.

Small business

The Government must continue the significant work that remains to be undertaken in respect of simplifying existing tax laws to alleviate the compliance burden on small business. This includes exploring the possibility of creating a separate ‘small business entity’ structure; streamlining access to small business concessions; and simplifying carry-forward loss integrity measures.

Superannuation

The Tax Institute encourages the Government to collaboratively construct a long-term, holistic plan for the superannuation system focussed on equity and sustainability. This includes addressing the low level and inflexibility of contributions caps, including via repeal of the ‘10% rule’ and further improving the excess contributions tax arrangements.

Deregulation

The Tax Institute supports the Government’s deregulation initiative and the publishing of a regulation impact statement in respect of each tax reform. However deregulation should not be at the expense of sound reform in areas such as regulation of financial advisers providing tax advice.

The full Budget submission will soon be available on our website.

Robert Jeremenko
Robert
Jeremenko
Robert Jeremenko CTA is Senior Tax Counsel of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Friday, 7 March 2014

Honouring the best minds in tax

This month, we celebrate the inaugural Tax Adviser of the Year Awards in Hobart at the 29th National Convention.

Tax Adviser of the Year Awards

For 70 years, The Tax Institute has been committed to honouring and showcasing the tax profession’s leading experts and rising stars. Later this month, we are proud to award our inaugural Tax Adviser of the Year Awards recipients at the 29th National Convention in Hobart.

Representing the best of the best, from rising stars to industry leaders, the recipients have been chosen from a pool of well-deserved tax professionals by our judging panel, including:

  • Arlene Macdonald, CTA (Life) 
  • the Honourable Ian V Gzell, QC, FTI (Life)
  • Ian Langford-Brown, FTI (Life) 
  • Jonathan Ilbery, CTA (Life) 
  • Peter McKnoulty, CTA 
  • Syd Jenkins, CTA.

We're sure you'll agree that these industry luminaries are well-equipped to select the cream of the crop.
The judges will be presenting awards for:


If you’re attending the National Convention in Hobart, we look forward to seeing you at the dinner!

Noel Rowland
Noel
Rowland
Noel Rowland is Chief Executive Officer of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.

Wednesday, 5 March 2014

Speaker Profile: Recent Cases

In the latest speaker profile in our series, we sit down with Melanie Baker CTA from the Victorian Bar who is presenting the Recent Cases session at the upcoming 29th National Convention in Hobart.

Tell us about yourself

I am a barrister at the Victorian Bar with over 14 years of experience in the field of taxation. I appear in, and advise in relation to, taxation matters for both taxpayers and the Commissioner of Taxation.

How long have you been affiliated with The Tax Institute?

I have been affiliated with The Tax Institute since 2003.

What does National Convention mean to you, and more broadly, to the tax industry?

The National Convention is a fantastic conference, which brings together tax professionals from all over Australia. The conference program invariably covers topical tax issues in a practical way, without compromising technical accuracy.

What is the topic that you are presenting at the 29th National Convention?

The Recent cases session on day two.

What can attendees expect to learn from your session?

It is a case update, so I am hoping to give attendees an overview of some of the more interesting and topical cases decided since last year’s National Convention. I am also going to provide some statistics concerning the taxpayers’ success (or otherwise) in challenging decisions of the Commissioner before the Courts.

What new or hot topics will you cover?

By definition, all the cases will be new. Attendees will have to rely on me to cover the ‘hot’ cases though, because I won’t have time to talk about them all!

How will attending your session help delegates help their clients?

By keeping them up to date with what the Courts have been up to recently.

Which other sessions at the conference are you most interested in attending? 

It is a tough call. It is fair to say that the issues to be dealt with by pretty much all of the sessions could potentially be relevant to me, because I receive briefs across all the segments – individuals, SMEs and large corporates. If I’m forced to make a selection though, it would have to be the session on the tax deductibility of interest – both because of the subject matter and the speaker.

What do you like to do when you’re not knee-deep in tax?

I enjoy bushwalking, although I haven’t done as much of it as I should since I tackled the Great Ocean Walk a year or so ago. During the week it took to walk from Apollo Bay to the Twelve Apostles, there was one day that involved hiking for miles along a beach, which had very soft sand, in strong headwinds and 43 degree heat while carrying an 18kg pack. Suffice to say, it broke me just a little…

29th National Convention 2014
You’re invited to join us in Hobart for the 29th National Convention 26-28 March 2014. The Tax Institute’s National Convention is widely recognised as the essential annual event for tax professionals. But hurry! Advanced pricing ends this Friday!

Find out more about the conference and register now.

Monday, 3 March 2014

Inspector-General of Taxation review update

Late last Friday week, the Assistant Treasurer released three reports prepared by the Inspector-General of Taxation in relation to the reviews into the income tax refund integrity program, use of data matching by the ATO and the ATO’s use of compliance risk assessment tools. The Tax Institute prepared submissions for each of these reviews conducted by the Inspector-General. The submissions can be accessed: Refund Integrity, Data Matching, and Risk Assessment Tools.

Members were greatly concerned in particular by the income tax refund integrity program that impacted on Tax Time 2011 where 109,000 Individual Income Tax Returns were selected for review before the refund would be issued rather than the 33,000 the ATO estimated would be selected.

Members detailed their experiences to us of the delays experiences in having their clients’ refunds processed, including many experiencing delays longer than the 12 weeks estimated it would take the ATO to clear the backlog. This information was provided to the Inspector-General. In response, the Inspector-General made 13 recommendations to the ATO, 12 of which the ATO as agreed to in full and the 13th in principle, which should go some way to improving the ATO’s refund review processes.

During the time, we also offered assistance to members to escalate their clients’ returns that were held up for review and many members took us up on our offer.

We commend the ATO for adopting the recommendations made by the Inspector-General and note that members’ experiences in relation to refund review processes in subsequent income years have been much more positive.

Robert Jeremenko
Robert
Jeremenko
Robert Jeremenko CTA is Senior Tax Counsel of The Tax Institute.

The Tax Institute is Australia’s leading professional association in tax. Its 13,000 members include tax agents, accountants and lawyers as well as tax practitioners in corporations, government and academia.