Update from the IGTO
In a webinar sponsored by Wolters Kluwer, Inspector-General of Taxation and Taxation Ombudsman (IGTO) Ms Karen Payne spoke on the role of the IGTO and provided an update on reviews in progress.
With the introduction of COVID-19 stimulus measures administered through the ATO, the webinar was a timely reminder of the avenues available when raising a tax administration complaint. This article gives an overview of the IGTO’s role in handling tax complaints and recent developments from systemic reviews.
Role of the IGTO
The IGTO is an independent statutory office that seeks to improve the administration of tax laws for the benefit of all taxpayers. It provides assurance to taxpayers through investigating, reviewing and reporting on how Australian tax administration laws are operating. The IGTO also helps taxpayers with complaints about administrative actions of the ATO and the Tax Practitioners Board (TPB).
Lodging a taxation complaint
Before making a complaint to the IGTO, a taxpayer should first seek to resolve the issue with the ATO. The IGTO will not commence an investigation where a taxpayer has not raised a complaint directly with the ATO.
At the first instance, taxpayers unsatisfied with an administrative decision or action should request internal review through the relevant ATO business line. At this stage, the decision will be reviewed by a decision maker or more senior member within the same ATO business line.
If a taxpayer is unsatisfied with the first review, they can proceed to lodge a formal ATO complaint. Formal complaints are handled by a separate team within the ATO, however Ms Payne notes that complaints tax officers may allocate the investigation to the original ATO business line responsible for making the decision.
Taxpayers who are unsatisfied with the outcome of the formal ATO review can then raise a complaint with the IGTO. The IGTO will independently investigate whether the original decision made was appropriate. Investigations are free of charge to taxpayers and undertaken privately, subject to same tax secrecy provisions as the ATO.
The IGTO has limited discretion to decline to investigate. Circumstances include where a taxpayer has not raised the complaint with the ATO or TPB or where the matter is more than twelve months old.
Complaints & COVID-19
The IGTO can investigate any tax administration matter, including day to day issues associated with payment arrangements, review of ATO debt recovery action, investigating delays and understanding decisions taken by the ATO. It can also investigate more complex procedural matters, such as assisting taxpayers in ensuring an ATO audit has been undertaken fairly and transparently.
It is important that eligible people and businesses are able to quickly and easily access COVID-19 related financial support offered through the tax system. Common complaints that the IGTO has assisted with relate to:
- delays and other issues with receiving payments from the ATO
- issues with understanding the COVID-19 measures themselves, such as eligibility
- lodgment and processing issues
- debt collection actions
- registration issues, such as ABNs
The IGTO has direct access to ATO records, personnel and systems when undertaking an investigation. Following an investigation, the IGTO will provide a recommendation on the disputed decision. This can include recommending that a decision is cancelled, that further reasons are given for a decision or that a particular course of action is taken to rectify the decision. The IGTO can also recommend that a matter is referred to another body for a decision, for example the Administrative Appeals Tribunal.
As the Office of the Inspector-General of Taxation, the IGTO also performs systemic reviews on the operation of tax administration laws and systems.
In its latest report Death and Taxes, the IGTO identified opportunities to improve the administration of deceased estates for surviving relatives, executors and tax agents. Issues raised with the current process include complex tax compliance obligations, the requirement for grant of probate to engage with the ATO and refunds of franking credits. Key recommendations that the ATO is considering include:
- implementing a system for digital notification of death
- digitisation of interactions required to manage affairs of a deceased person, and
- developing an easier approach for simple estates that do not have a probate or letters of administration.
The IGTO’s current review is an investigation into the effectiveness of ATO communications of taxpayers’ rights to complain, review and appeal. The review seeks to identify opportunities to improve the clarity and adequacy of such information in line with principles of procedural fairness and the Taxpayers’ Charter. The IGTO welcomes all taxpayers, advisers and professional bodies to make submissions on how to improve communication and awareness of taxpayers’ rights of review.
If you missed this webinar, you can access the CCH Learning recording here.
[This article was published in CCH Tax Week on 10 July 2020. Tax Week is included in various tax subscription services such as The Australian Federal Tax Reporter and CCH iKnow. CCH Tax Week is available for subscription in its own right. This article is an example of many practitioner articles published in Tax Week.]