Review: Tax identity fraud – an own-initiative investigation

Reviews and reports

This is the interim report of our own initiative investigation into tax identity fraud, focusing on the importance of bank account integrity. The report focuses on the ATO’s risk management controls to prevent fraudsters from changing the bank account details on legitimate taxpayers’ ATO accounts, which is a fundamental step in obtaining fraudulent refunds from the tax system.

This is the interim report of our own initiative investigation into tax identity fraud, focusing on the importance of bank account integrity. The report focuses on the ATO’s risk management controls to prevent fraudsters from changing the bank account details on legitimate taxpayers’ ATO accounts, which is a fundamental step in obtaining fraudulent refunds from the tax system.

Following the commencement of our investigation, the Tax Ombudsman received numerous submissions from the taxpayer and tax practitioner community that raised concerns about the ATO’s lack of action in detecting and preventing tax identity fraud. We also investigated ATO actions taken in response to potential tax identity fraud that were the subject of taxpayer disputes (unresolved complaints).

We make 13 recommendations for ATO improvement in this interim (Phase 1) report.

Documents and downloads

Tax Ombudsman’s interim report
Tax Ombudsman report summary
ATO response cover letter – 14 February 2025

Review: The administration of the Commissioner’s remedial power

Reviews and reports

This report examines the discretionary statutory power for the Commissioner of Taxation to temporarily modify the operation of taxation law provisions where those provisions give rise to unintended or unforeseen outcomes.

The report explores the ATO’s approach to receiving, considering and determining which issues are suitable for the exercise of the power and the reasons why candidates may fail. The report identifies a number of opportunities for improvement.

Documents and downloads

Tax Ombudsman’s report
Tax Ombudsman report summary
ATO response – 6 November 2023

2022 Australasian and Pacific Ombudsman Region Conference

The IGTO attended a conference held by the Australasian Pacific Ombudsman Region (APOR) on 13 October 2022 and its 34th annual Members’ meeting on 14 October 2022 in Wellington, New Zealand.

APOR Conference

Communiqué of the APOR conference and 34th Members’ meeting 13 and 14 October 2022

The Australasian Pacific Ombudsman Region (APOR) held a conference on 13 October 2022 and its 34th annual Members’ meeting on 14 October 2022 in Wellington, New Zealand.

The conference, on remaining relevant and getting government to listen, was co-hosted by Victorian Ombudsman Deborah Glass OBE as Regional President and New Zealand Chief Ombudsman and IOI 2nd Vice President Peter Boshier.

It coincided with celebrations to mark the 60th anniversary of the Ombudsman in Aotearoa, New Zealand, being the first of its kind outside Scandinavia, agreed by APOR Members to be a global leader of Ombudsmanship and model exemplar in the region.

The APOR Members:

  1. Reaffirm the Principles on the Protection and Promotion of the Ombudsman Institution (the Venice Principles) adopted by the Venice Commission on 15 March 2019, which set out the international standards for the Ombudsman institution, including:
    • a mandate based on firm legal foundations at the constitutional and statutory level (Article 2);
    • the election of Ombudsmen according to procedures strengthening to the highest possible extent the authority, impartiality, independence and legitimacy of the institution (Article 6);
    • the freedom of the Ombudsman from following any instruction from any authority (Article 14); and
    • the need for sufficient and independent budgetary resources (Article 21).
  2. Reaffirm the Resolution adopted by the United Nations General Assembly on 16 December 2020, The role of the Ombudsman and mediator institutions in the promotion and protection of human rights, good governance and the rule of law (A/RES/75/186), that: a. acknowledged the Venice Principles;
    • upheld the importance of the Ombudsman role; and
    • encouraged all United Nations member states to consider creating and strengthening independent and autonomous Ombudsman institutions (Article 2).
  3. Reiterate the importance of the role of the Ombudsman for the promotion of good public administration, protection of citizens’ rights and wellbeing, respect for human rights and fundamental freedoms, and strengthening of public services through the rule of law, transparency, accountability and fairness.
  4. Recognise the particular needs and pressures on our Pacific Ombudsmen, not least the challenges the Pacific region faces at the frontline of climate change. As a region, we stand together in solidarity to provide ongoing support.
  5. Emphasise the right of the Ombudsman institution to operate independently, without interference or external pressure or influence.
  6. Commit to ongoing cooperation and sharing of best practices with Members and the wider Ombudsman fraternity.

The Australian Taxation Office’s Administration and Management of Objections – Phase 2

TERMS OF REFERENCE

The IGTO’s investigation will examine the concerns raised above and seek to identify improvements to objection processes for the benefit of taxpayers and tax practitioners. Specifically, the IGTO will examine whether:

  1. the ATO’s systems and processes for receiving, allocating, considering and finalising objections are sufficiently robust to minimise undue delay;
  2. the policies and processes for managing objections provide for an independent and impartial review of the audit decision;
  3. the current processes for managing Objections allows for sufficient engagement, interaction and exchange with taxpayers and their representatives to achieve a common understanding of, and to narrow, the issues in dispute;
  4. the Objections process is effective in minimising and resolving disputes, including through early and effective identification of cases that are suitable for alternative dispute resolution and /or settlement; and
  5. any other relevant or related matters identified by the IGTO throughout the course of the investigation, or as raised by stakeholders in submissions.

The IGTO welcomes feedback from stakeholders – including professional and industry bodies, tax practitioners and taxpayers – on any concerns they have in relation to the objection process and potential improvements that may be implemented to improve the process for the benefit of all.

How to lodge a submission

The closing date for submissions is 4 November 2022. Submissions may be lodged by telephone (02 8239 2111) or be sent by:

Post to:Inspector-General of Taxation and Taxation Ombudsman GPO Box 551 Sydney NSW 2001
Fax:(02) 8088 7815
Email to:[email protected]
Terms of Reference – ATO’s Administration and Management of Objections321 KB

The Exercise of the Commissioner’s Remedial Power

TERMS OF REFERENCE

Through the IGTO’s tax complaint investigation service, it has been observed that there appears to be a lack of clarity about how issues are raised for CRP consideration and whether the processes underlying consideration of these matters are sufficiently robust to take into account consideration of relevant factors and expert stakeholder views. This is important as decisions of the Commissioner in relation to the CRP are not subject to external merits or judicial review.

The IGTO’s investigation will examine:

  1. the processes by which (potential) CRP matters are identified, including the processes by which the ATO assures itself that it has sought to adopt a purposive interpretation of the law;
  2. the processes by which (potential) CRP matters are considered, including the application of the criteria in Division 370 of Schedule 1 to the Taxation Administration Act 1953;
  3. the regulatory and compliance impact (including the frequency and circumstances) of the use of the CRP;
  4. whether the ATO’s systems and processes to receive, consider and determine CRPs are operating effectively, efficiently and with timeliness and transparency taking into account all relevant factors and stakeholder feedback;
  5. how consideration and decisions in relation to the CRP are recorded and communicated, both internally and externally;
  6. whether processes in relation to the CRP are well-known and well-understood across the tax practitioner community and within the ATO;
  7. how the ATO engages with stakeholders as part of its CRP consideration; and
  8. any other relevant matters that arise during the course of the IGTO investigation or as identified by stakeholders in submissions.

The IGTO welcomes feedback from stakeholders – including professional and industry bodies, tax practitioners and taxpayers – on any concerns they have in relation to the CRP processes and potential improvements that may be implemented.

How to lodge a submission

The closing date for submissions is 28 February 2022. Submissions may be lodged by telephone (02 8239 2111) or be sent by:

Post to:Inspector-General of Taxation and Taxation Ombudsman GPO Box 551 Sydney NSW 2001
Fax:(02) 8088 7815
Email to:[email protected]
Terms of Reference – Exercise of the Commissioner’s Remedial Powers265 KB

The Exercise of the General Powers of Administration

TERMS OF REFERENCE

The IGTO’s investigation does not propose to examine every type of decision that may be made under the GPA, but will draw from case studies in our complaints investigation service as well as stakeholder submissions to identify and investigate particular areas raised as examples of exercise of the GPA that should be investigated. In particular, the IGTO is interested to understand how broad-based GPA decisions (i.e., those affecting large groups of taxpayers) are identified and determined. As there are limited avenues for taxpayers and tax practitioners to challenge the exercise of the GPA, it is important to ensure that processes and procedures underpinning these decisions are robust and effective.

Through case studies and examples, the IGTO’s investigation will examine:

  1. the processes by which GPA matters are identified and considered, and how the ATO assures itself that its consideration of the issues accord with a purposive interpretation of the law;
  2. the regulatory and compliance impact (including the frequency and circumstances) of the use of the GPA;
  3. whether the ATO’s systems and processes to receive, consider and determine matters for the exercise of GPA are operating effectively, efficiently and with timeliness and transparency taking into account all relevant factors and stakeholder feedback;
  4. how consideration and decisions in relation to the GPA recorded and communicated, both internally and externally;
  5. whether processes in relation to the GPA are well-known and well-understood across the tax practitioner community and within the ATO; and
  6. any other relevant matters that arise during the course of the IGTO investigation or as identified by stakeholders in submissions.

The IGTO welcomes feedback from stakeholders – including professional and industry bodies, tax practitioners and taxpayers – on any concerns they have in relation to the GPA processes and potential improvements that may be implemented.

How to lodge a submission

The closing date for submissions is 28 February 2022. Submissions may be lodged by telephone (02 8239 2111) or be sent by:

Post to:Inspector-General of Taxation and Taxation Ombudsman GPO Box 551 Sydney NSW 2001
Fax:(02) 8088 7815
Email to:[email protected]
Terms of Reference – Exercise of the Commissioner’s General Powers of Administration285 KB

Review: The effectiveness of ATO communications of taxpayers’ rights to complain, review and appeal

Reviews and reports

This investigation examines the effectiveness of the Australian Taxation Office’s (ATO) communications to taxpayers and their representatives of their taxpayers’ rights to review, complain and appeal decisions made and actions taken by the ATO.

The investigation involved an examination of a case sample of written communications of ATO decisions made – for clear communication of the taxpayers’ rights to review, complain and appeal these decisions. The communication of taxpayers’ rights is an important feature of procedural fairness and is consistent with the Taxpayers’ Charter. These rights and the community’s awareness of them is important for maintaining confidence in the fairness of the tax administration system.

Tax Ombudsman survey

Between August and September 2020, we engaged Orima Research Pty Ltd to conduct a voluntary and independent survey to gauge taxpayers’ and tax professionals’ views on the effectiveness of ATO communications on taxpayers’ right to review, complain and appeal decisions.

The survey comprised 10 questions (of which 3 sought demographic information from respondents). A list of the questions is available for download.

A total of 69 respondents participated. Some respondents chose not to answer certain questions.

Documents and downloads

Tax Ombudsman final report
Tax Ombudsman report summary
ATO letter of response – 12 October 2021
Tax Ombudsman survey results
Tax Ombudsman polling results
Terms of reference

Review: The ATO’s administration of JobKeeper enrolment deferral decisions

Reviews and reports

This report sets out the findings and conclusions from our tax complaint investigations of the Australian Taxation Office’s (ATO’s) administration of applicants’ requests to defer the due date for lodgement of JobKeeper enrolment notices (JobKeeper enrolment deferral), in accordance with:

  • Section 388-55 of Schedule 1 to the Taxation Administration Act 1953 (TAA 1953); and
  • The Commissioner of Taxation’s instructions to ATO staff, practice statement PS LA 2011/15 Lodgment obligations, due dates and deferrals (PS LA 2011/15).

JobKeeper enrolment deferrals allow JobKeeper applicants to enrol for JobKeeper retrospectively and receive JobKeeper payments for fortnights prior to the fortnight in which the notice of enrolment is given to the Commissioner.

Documents and downloads

Tax Ombudsman report and appendices
Tax Ombudsman report only (no appendices)
Appendices only

Review: Investigation and exploration of undisputed tax debts in Australia

Reviews and reports

The report presents a summary and analysis of a large amount of data as supplied by the Australian Taxation Office (ATO). The data relates to levels of undisputed tax debts (and changes in these debts) over the past several years, commencing in FY16 and ending in FY20 – that is, as reported at 30 June in each financial year. The report delivers a number of key related insights and makes five recommendations for consideration by the ATO as outputs from the investigation.

The report is a key piece of research intended to provide Australian taxpayers, tax practitioners, government and business with a detailed understanding of where tax debts are accruing in the tax system and occurring in the economy.

Documents and downloads

Tax Ombudsman report
Tax Ombudsman report summary slides
Terms of Reference