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 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.