The Inspector-General of Taxation (IGT), Mr Ali Noroozi, today announced terms of reference for three reviews relating to the Australian Taxation Office's (ATO) compliance approaches to individual taxpayers.
"My office has received a large number of concerns from taxpayers and tax practitioners regarding the ATO's compliance approach to individual taxpayers particularly during consultation on my work program," Mr Noroozi said.
"Given the broad range of issues raised and the large number of taxpayers involved as well as my resources, I am focusing on three areas that seem to be causing the most concern. This approach should deliver more timely improvements in these specific areas and have a positive impact on the ATO's compliance approach to individual taxpayers more generally," he said.
The three areas for review are:
The ATO's income tax refund integrity program — this review will consider the efficiency and transparency of the integrity program and whether the actions taken are appropriate given the impact on taxpayers and tax practitioners on the one hand and the risk to government revenue on the other.
"Despite improvements made by the ATO, concerns persist relating to delayed refunds, communications surrounding them and whether the burden imposed on taxpayers and tax practitioners is proportionate to the potential risk being mitigated by the program," Mr Noroozi said.
The ATO's administration of superannuation excess contributions tax (ECT) — this review will consider the transparency of ATO ECT decisions including the basis for assessment and the ATO's exercise of discretion to reallocate or disregard excess contribution amounts.
"The superannuation and ECT regime are complex and taxpayers believe they're being unduly penalised due to minor errors or matters outside their control," said Mr Noroozi.
The ATO's use of data matching — this review will consider the data integrity, analysis and communication relating to a range of different ATO data matching activities as well as the nature of engagement with taxpayers in resolving disputes arising from data 'mismatches'.
"Stakeholders support data matching where the outcomes assist taxpayers to comply with their obligations, for example, the income tax return pre-filling initiative. However, concerns have been raised with the accuracy, reliability and currency of third party data and ATO processes that address mismatches with taxpayer-provided information," Mr Noroozi said.
Each review will examine the specific concerns and identify improvement opportunities for the system.
Mr Noroozi added, "My aim for each review is to improve the administration of the tax system by striking a better balance between minimising any adverse impact on taxpayers and the ATO getting its job done."
Submissions are strictly confidential and not made available to any other party. Your submission should also address the terms of reference and submission guidelines available on the IGT website: www.igt.gov.au. Submissions are due by 18 December 2012.
20 November 2012
Media contact: Ali Noroozi - (02) 8239 2111