In response to the IGT's preliminary views on areas for improvement and our discussions with the review's working group the ATO has identified the following areas for improvement for active compliance activities in the HWI and S&ME market.
1. Replacement of Wealthy and Wise booklet
The current version of the 'Wealthy and Wise' booklet (published in March 2008) will be replaced by a new booklet to reflect an updated and broader view of our approach to managing compliance from a private wealth/private group approach and more broadly across the S&ME market.
The new booklet will provide guidance on our risk assessment and compliance approach to the private group/wealth market along with the broader S&ME segment. It will also provide guidance on our relationships and interactions with taxpayers and advisers, the behaviours we would expect to see from our people, and the procedures we would follow when conducting risk assessment , review and audit activity in the segment.
Like the 'Large business and tax compliance' booklet our expectations of taxpayers and advisors in terms of their tax compliance and their interaction with us during our activities will also be covered.
We see the development of the new booklet as a collaborative and co design process with both taxpayers and advisers in this segment. We will be engaging with a range of external and internal stakeholders in the process of developing the new booklet. We are targeting a publication date of July 2012.
2. Centralised Case Selection and Preparation
S&ME will implement a new centralised case preparation and selection process which is designed to utilise more of our new automated data collection and collation processes.
The new process will provide our active compliance staff with a much richer picture of the taxpayer and the risks associated with that taxpayer along with all the relevant information the ATO holds on that taxpayer prior to us having any contact with the taxpayer or their advisor.
This process will minimise the need to contact taxpayers or advisers for the basic information we might need prior to commencing a review or audit.
We will design and build a 'complexity measure and indicator 'into our case selection process to enable us to better understand the nature of case work we plan to undertake. The indicator will also provide us with a better basis for planning our resource needs and allocation of the correct resources to match the case work. We plan to have this in place for the 2012/13 year.
3. Information requests
While further information requests will remain part of the review and audit process S&ME will review its procedures related to seeking and managing further information requests to ensure that they support full engagement with the taxpayer or advisers in relation to the nature, extent and timing of such requests.
4. Active Case Management
S&ME will undertake the following activities to improve our case/project management of active compliance cases:
We will participate in the upcoming cross sub plan roll out of training designed to improve active case management of review and audit cases. This will include a 1 day training session for all staff to be rolled out over the balance of 2011/12.
Outline in the new 'Wealthy and Wise booklet' our focus on and processes around review and audit case/project management
We will upgrade our routine reporting to include 'milestone' reporting of review and audit cases.
For audit cases we will, subject to agreement from the taxpayer and adviser, have the team leader of the audit officer involved in the initial audit interview. The team leader (generally and EL 2 officer) will be initial escalation point for the taxpayer or adviser if there are issues which cannot be resolved with the audit officer. This initiative will be part of our process by March 2012.
In addition to the inclusion of the team leader at the initial audit interview we will also be looking for more opportunities to engage face to face with taxpayers and their advisers. This will allow us to more effectively clarify issues, resolve disputes or misunderstandings and to assist in finalising cases more quickly and effectively. While this activity occurs in many cases now we are looking to expand it as a key part of our audit processes and add to the opportunity it provides to get better technical outcomes and more efficient timeframes for case work. This focus will be built into our processes by the end of the 2011/12 year.
5. Collective capability model and ongoing capability build
S&ME we will continue to use the S&ME capability snapshot data, our learning pathway information, the new corporate Learning & Development capability processes and our team leaders and our senior technical leaders to identify and attend to our skilling and development needs.
We expect to see a larger rollout of skilling opportunities in 2011 /12 than was the case in 2010/11 as the corporate Learning & Development processes bed down. We will ensure we take advantage of this by continuing to target our skilling needs and access the skilling and development we need to ensure our work force a capability continues to improve.
We will continue to build our capability based on the ATO model of collective capability. This means we will make regular use of senior technical specialists such as our Senior Technical Leadership team, our SES level case leadership team, our CoE's and TCN to provide support and assistance to case officers as required to resolve technical issues and progress case work.
The upcoming (October 2011) integration of our active compliance workforce's from high wealth individuals (HWI), general compliance and wealthy Australians (WA) will provide us with further opportunities to enhance capability as we will have EL2s leading each of the active compliance teams and a mix of skilled and experienced staff from HWI and general compliance in each team.
Our new 'Wealthy and Wise booklet' will provide a picture of how we use the collective capability model in practice.
We also see our intention to do more face to face work with adviser and taxpayers as providing us with opportunities to improve our capability in resolving technical issues and finalising cases more efficiently.
S&ME will pilot of the 'Transforming Tax Technical Decision Making' project (TTTDM) which is beginning in a September 2011.The program is designed to ensure that specialist technical resources from areas such as CoE s and TCN are involved in and providing advice and assistance on case work early in the life of a review or audit case. This pilot will include having these specialist staff involved in taxpayer interviews and discussions where necessary.
6. General Process Improvements.
We will reissue the instructions and reinforce the requirements to use the Facts and Evidence worksheet in a range of S&ME case work.
We will be taking part in the upcoming Compliance sub plan dispute review processes and will implement any recommendations relevant to S&ME active compliance work which flow from that review.
We are currently working on an improved reporting interface with the Interpretative Assistance area. This will ensure we can track audit cases which proceed to an objection and thereby undertake ongoing analysis and review of the issues which are being dealt with in objection cases. We expect this work will be completed by March 2012.
Please contact [name deleted] if you require any further information on the matters detailed above.
Actg Deputy Commissioner
Small and Medium Enterprises