Review: The future of the tax profession

Reviews and reports

This review examined the challenges and opportunities presented by new and emerging digital technologies, along with the accompanying social, policy and regulatory impacts on the administration of the tax system and the tax profession.

The review highlights the need for all participants within the tax system to take prompt action to address the upcoming challenges and realise the benefits presented by emerging opportunities. Given the interconnectedness of the Australian Taxation Office (ATO), the Tax Practitioners Board (TPB) and tax professionals, it is imperative that they take collective and well-coordinated action which can only be achieved through a strong and collegiate working relationship. It is regrettable, therefore, that in recent years, the working relationship particularly between the ATO and the tax profession has been strained through ongoing IT stability issues and unfortunate ATO commentary such as those in a recent speech by the Commissioner regarding work-related expenses. Building on previous IGT reviews, there are further recommendations in this review aimed at improving this crucial relationship.

Overall, 9 recommendations (comprising 28 parts) were made: three parts for the Government’s consideration, 19 parts for the ATO and the remaining 6 parts for the TPB. The TPB has agreed to all recommendations made to it. Whilst the ATO had initially indicated agreement with the majority of recommendations, in the final stages of the review, it conveyed disagreement with 8 parts of the recommendations. The ultimate disagreements are with parts of the recommendations aimed at enhancing the ATO workforce, assisting tax practitioners to prepare themselves to meet the future challenges and ensuring that the fragile relationship between tax practitioners and the ATO is carefully managed.

Documents and downloads

Tax Ombudsman report
ATO letter of response – 26 October 2018
TPB letter of response – 26 October 2018
Government response – 3 April 2019

Review: Australian Taxation Office use of garnishee notices

Reviews and reports

The Inspector-General of Taxation and Taxation Ombudsman commenced this review to maintain community confidence in the administration of the tax system after serious allegations were made about the Australian Taxation Office’s (ATO) inappropriate use of
garnishee notices on small businesses. These allegations
were made by both a current and former ATO officer on the
Australian Broadcasting Corporation’s (ABC) Four Corners
program on 9 April 2018. We investigated allegations that the ATO:

  • gave directions to staff to issue enduring garnishee
    notices in every case as a ‘cash grab’ towards the end of the
    2016–17 financial year; and
  • set targets for staff and assessed their performance
    based on the level of debt collected.

Garnishee notices allow the ATO to recover taxpayer debts from third parties such as banks or trade debtors. If use inappropriately they can severely affect a taxpayer’s cash flow; in particular, the more vulnerable, such as small businesses and individuals.

In our view, the allegations that there was an ATO direction for a ‘cash grab’ on small businesses or that debt staff’s personal performance were set on amounts collected are not sustained on the evidence.

Downloads and documents

Tax Ombudsman report

Review: ATO internal fraud control management

Reviews and reports

Our review into the Australian Taxation Office’s (ATO) fraud control management was commenced at the request of the Senate Economics
References Committee. It followed events connected to Operation Elbrus including allegations of tax fraud that may be linked to abuse of position by a public official.

The review has not found evidence of systemic internal fraud or corruption. Generally, the ATO has sound systems in place for managing risks of internal fraud, however, the review has uncovered a number of areas which require improvement.

We made 13 recommendations to the ATO, all of which were agreed either in full or in part.

Downloads and documents

Tax Ombudsman report
ATO letter of response – 7 June 2018
Government response – October 2018

Review: Goods and Services Tax refunds

Reviews and reports

Our review into Goods and Services Tax (GST) refunds
arose from concerns raised through the our complaints handling service and during consultation to develop the 2017 work program. These concerns included the accuracy of the ATO’s risk assessment tools, its engagement with taxpayers and its efforts to minimise adverse impacts on affected taxpayers.

We reviewed the end-to-end process involved in refund verification including from initial case selection through to the review and audit activities. Overall, we found that the ATO’s administration of GST refunds operated efficiently with the vast majority of refunds released without being stopped for verification.

We made 5 recommendations (comprising 16 parts), all of which were agreed either in full or in part.

Downloads and documents

Tax Ombudsman report
ATO letter of response – 13 March 2018
Government response – June 2018

Review: Taxpayers’ Charter and taxpayer protections

Reviews and reports

Our review into the Taxpayers’ Charter (Charter) and taxpayer protections was undertaken to examine concerns raised in relation to the Australian Taxation Office’s (ATO) adherence to the Charter, its currency and effectiveness. Specifically, stakeholders consider that there are limited avenues for enforcement of the Charter principles, diminishing its effectiveness in affording protection to taxpayers.

As part of the review, we compared the Australian approach with those partner jurisdictions, such as the United States of America, the United Kingdom, Canada and New Zealand. Additionally, a significant body of academic and other research was considered, including those of the Organisation for Economic Cooperation and Development, the International Bureau of Fiscal Documentation and professional bodies
(including the Asia-Oceania Tax Consultants’ Association, Society of Trust and Estate Practitioners and Confederation Fiscale Europeene) that collectively represented more than half a million tax practitioners worldwide. Moreover, the IGT also commissioned the University of New South Wales to research and report on existing taxpayer rights in
Australia and, from that research, drew observations regarding the difficulties taxpayers may face in seeking to enforce their rights.

Overall, we made 4 recommendations with which the ATO has either agreed in full, in part or in principle. However, the ATO’s level of agreement and their accompanying commentary create a level of uncertainty as to how and to what extent the recommendations
would be implemented. Accordingly, to the extent that stakeholder concerns persist, we may undertake a follow-up review to assess the effectiveness of resulting ATO actions and, if necessary, make recommendations for government to consider mandatory reporting of the
ATO’s compliance with the Charter and additional enforceable remedies.

Documents and downloads

Tax Ombudsman report

Review: Aspects of the Australian Taxation Office’s use of compliance risk assessment tools

Reviews and reports

Our review into aspects of the Australian Taxation Office’s (ATO) use of compliance risk assessment tools was prompted by concerns raised about their effectiveness by taxpayers, tax practitioners and their representative bodies. It had also been identified as a review topic during the course of previous reviews.

Stakeholders have acknowledged that it is appropriate for the ATO to adopt a risk-based approach in its compliance strategy. In fact, most comparable revenue authorities take such an approach to make the best use of their resources in protecting government revenue.

Our report makes 16 recommendations to the ATO, all of which have been agreed.

Documents and downloads

Tax Ombudsman report