La Law Counc uncil il of Aus ustr tralia alia Ta Taxation - - PowerPoint PPT Presentation
La Law Counc uncil il of Aus ustr tralia alia Ta Taxation Committee Meeting 22 22 November 2019 2019 Ki King ng & Wood d Ma Malleso sons, , Me Melbourn rne Karen Payne Inspector-General of Taxation and Taxation Ombudsman
22 22 November 2019 2019 Ki King ng & Wood d Ma Malleso sons, , Me Melbourn rne
Karen Payne Inspector-General of Taxation and Taxation Ombudsman
Inspector-General of Taxation | Taxation Ombudsman 22/11/2019 2
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 3
agencies or the community in general) through investigation, review and reporting that Australian taxation administration laws are operating effectively and consistent with community expectations.
Inspector-General of Taxation | Taxation Ombudsman 22/11/2019 4
Investigate
Taxpayers and Tax Practitioners
Report
(Complaints and Actions)
Recommendations
Referral
Parliament in Complaint Cases raising serious issues of conduct
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 5
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 6
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 7
Inspector-General of Taxation | Taxation Ombudsman
Ov Overvie view w of Taxatio ion Admin inis istratio ion System
22/11/2019 8
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 9
DISCLOSURE IS MADE TAXPAYER ATO OFFICER OR TPB OFFICER TAX PRACTITIONER
Voluntarily Protection from civil action only - Note 1 Protection from civil action only - Notes 1 and 2 Protection from civil action only - Notes 1 and 2 Preliminary to an investigation or Review – Note 4 Documents are inadmissible No liability to statutory penalties Authorised disclosure under the Privacy Act 1988 – Note 3 No loss of Legal Professional Privilege Documents are inadmissible No liability to statutory penalties Authorised disclosure under the Privacy Act 1988 – Note 3 No loss of Legal Professional Privilege Documents are inadmissible No liability to statutory penalties Authorised disclosure under the Privacy Act 1988 – Note 3 No loss of Legal Professional Privilege In response to a Review – Note 4 Yes, if the information is lawfully
Documents are inadmissible No liability to statutory penalties Authorised disclosure under the Privacy Act 1988 Legal Professional Privilege is unaffected Yes, if the Commissioner has authorised the officer to give the information - Notes 1, 2, 3 and 4 Documents are inadmissible No liability to statutory penalties Authorised disclosure under the Privacy Act 1988 Legal Professional Privilege is unaffected Yes, if the information was lawfully obtained but confidentiality and professional ethical obligations may apply Documents are inadmissible No liability to statutory penalties Authorised disclosure under the Privacy Act 1988 Legal Professional Privilege is unaffected Compulsorily – Note 6 Yes, if Notice is served in writing Yes, if Notice is served in writing Yes, if Notice is served in writing
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 10
1. Section 37 of the Ombudsman Act 1976. Protection from civil action (in respect of loss, damage or injury of any kind suffered by another person) is provided for the following acts done in good faith: a. making a complaint to the IGTO; b. making a statement or providing a document or information for the purposes of the IGT Act 2003 2. These protections do not fully override statutory, professional and ethical obligations of confidentiality & secrecy – which carry criminal and statutory penalty sanctions for breach or professional sanctions. That is, there are no personal protections from statutory or criminal penalties for voluntary disclosure. See for example, Division 355 of the Taxation Administration Act 1953. 3. Authorised disclosure under the Privacy Act 1988 Schedule 1, Clause 2.1(g) – the use or disclosure is required or authorised by or under law. 4. The protections are not available without commencement of an investigation and only if the Commissioner has authorised the officer to provide the information (section 8(2A)(b)(iii) of the Ombudsman Act 1976), unless disclosure is made in response to an IGTO preliminary inquiry and in accordance with an arrangement with the Commissioner of Taxation under section 7A of the Ombudsman Act 1976. 5. Section 8 protections include: Documents are inadmissible, No liability to statutory penalties and Legal Professional Privilege is unaffected. 6. Victimisation offences (6 months imprisonment) also apply if detriment is caused or threatened to the person who is compelled to provide information.
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 11
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 12
Must Conduct Minister May Conduct Own Initiated ATO TPB Parliamentary Committees House of Representatives Senate Joint
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 13
49 completed reviews to date
Inspector-General of Taxation | Taxation Ombudsman
Number Completed IGTO own initiative 41 Direction or request by the Minister 3 Request by Parliamentary Committees 2 Request by the Commissioner of Taxation 3 Total 49
22/11/2019 14
2019 - Review into the ATO’s use of Garnishee Notices
Own Initiated Review In response to allegations made on the ABC Four Corners television program aired on 9 April 2018
2018 - Review into the ATO’s Fraud Control Management
Senate Standing References Committee
In response to events relating to the AFP’s Operation Elbrus
2018 - Review into aspects of the PAYG Instalments System
Own Initiated Review In direct response to insights drawn from the IGTO’s complaints handling service
2017 - Review into the ATO’s employer
activities
Own Initiated Review In response to concerns raised by employers, workers, superannuation funds and tax professionals
Inspector-General of Taxation | Taxation Ombudsman 22/11/2019 15
An investigation into ATO systems and processes for dealing with deceased estates
The investigation seeks to identify opportunities to improve the administration of deceased estate tax compliance. The IGTO will examine and consider:
‒ the experiences of the community (family and friends) in managing the tax affairs for the deceased; ‒ the ATO’s policies, processes and guidelines for receiving information from and dealing with deceased estates; ‒ the public guidance issued by the ATO to assist executors or administrators; ‒ the ATO’s systems, including the ATO Portals, for dealing with deceased estates; ‒ any legislative impediments to the efficient administration of deceased estates; and ‒ any other relevant issues to the administration of deceased estate tax obligations. ‒ All taxpayers, advisers (tax practitioners, solicitors or barristers, financial planners, trustee and estate service providers) and professional bodies are welcome to provide examples and suggestions for improving the administration of the tax laws and systems for the deceased.
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 16
‒ a lack of acknowledgment from the ATO following notification of the death of a taxpayer; ‒ difficulties or delays obtaining a deceased estate tax file number; ‒ inconsistent steps for executors to provide their identity to access information, which is made more challenging in instances where the taxpayer died intestate (without a will); ‒ inconsistent advice and requirements to obtain probate or letters of administration; ‒ inability to appoint registered tax practitioners or solicitors as authorised contacts; ‒ difficulties or delays in accessing taxpayer information for the purposes of finalising taxpayer and deceased estate trust returns; and ‒ denial of access to the ATO Portals.
planners, trustee and estate service providers) and professional bodies are welcome to provide examples and suggestions for improving the administration
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 17
An investigation and exploration into uncollected and undisputed tax debts in Australia.
This investigation will essentially scope and analyse the national undisputed tax debt position and as such will reference and build upon existing reports in this area including:
Collection
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 18
ATO Data FY16 FY17 FY18 FY19 Activity statement $10.2 billion $11.3 billion $12.3 billion $14.3 billion Income tax $8.3 billion $8.8 billion $10.3 billion $10.8 billion Superannuation guarantee charge $0.6 billion $0.7 billion $0.9 billion $1.1 billion Total $19.2 billion $20.9 billion $23.7 billion $26.2 billion 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 19
[i] Source: Commissioner of Taxation Annual Report 2017-18, p 198 and Annual Report 2018 -19 pp 177 - 178. The breakdown of collectable debt lists
Va Value of debt holdings by client experience, 2016–17 t 17 to 2018 2018–19 19 Ac Activity 2016–17 ($b) 2017–18 ($b) 2018–19 ($b) In Individuals
2.3 2.7 2.9
0.3 0.2 0.2
0.5 0.4 0.4 Sm Small business
13.9 15.1 16.5
1.8 1.0 1.4
4.0 3.7 3.9 Pr Privately owned and wealthy groups
3.8 5.0 5.6
1.2 3.0 3.4
2.4 2.6 2.8 Pu Public and multinational businesses
0.7 0.7 1.1
4.7 5.5 6.3
0.3 0.3 0.4 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 20
House of Representatives Standing Committee on Tax and revenue - 2017 Annual Report of the Australian Taxation Office – fairness, functions and frameworks – performance review Recommendation 1 The Committee recommends the Inspector-General of Taxation should conduct a review of the role of outsourcing in the transformation of the ATO’s performance and culture.
Reinvention of the ATO’s service culture in particular, and consider:
the Reinvention of the ATO’s service culture.
Taxpayers’ Charter, and for staffing standards, including staff diversity, training and conditions for outsourced staff; and
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 21
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 22
C
p l a i n t T a x p a y e r T a x p a y e r T a x A g e n t T a x p a y e r r e p r e s e n t a t i v e I G T O I n v e s t i g a t i
G a t h e r F a c t s I n t e r v i e w A T O O f f i c e r s d i r e c t a c c e s s t
T O r e c
d s I G T O R e c
m e n d a t i
s A T O / T P B R e s p
s e i m p l e m e n t r e p
t r e a s
s f
n
i m p l e m e n t i n g R e p
t t
i n i s t e r R e p
t t
a r l i a m e n t
and impartially … We do not advocate for Taxpayers or the ATO or TPB
verify facts and arrive at independent conclusions
the ATO/TPB
‒ investigate in such manner as Ombudsman thinks fit ‒ Obtain information from such persons and make such inquiries as s/he thinks fit ‒ Use compulsory powers to access information or documents ‒ Conduct interviews ‒ Examine witnesses ‒ Enter premises ‒ Refer questions to the AAT
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 23
‒ I don’t understand the ATO’s explanation about how my debt is calculated ‒ Why have I been issued a Director Penalty Notice ‒ I am having difficulty with my payment arrangements ‒ I don’t understand why I have been garnisheed ‒ Why has my refund been used to offset a debt ‒ Where is tax refund – service standards ‒ Why isn’t the ATO making my employer pay my super ‒ The ATO never sent me that notice ‒ The ATO hasn’t considered my evidence and circumstances in its audit
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 24
‒ Inform principal officer [8(1) O Act] ‒ Conduct investigation in private [8(2) O Act] ‒ Report [12(4) or 15 O Act]
‒ Compliant is frivolous or vexatious or not made in good faith ‒ Complainant does not have sufficient interest in subject matter of complaint ‒ The complainant has not raised the complaint with the ATO Commissioner or TPB ‒ More than 12 months old ‒ Right to review by a court or tribunal has not been exercised
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 25
‒ Appears to have been contrary to law ‒ Was unreasonable, unjust, oppressive or improperly discriminatory ‒ Was in accordance with law but the law itself was unreasonable, unjust, oppressive or improperly discriminatory ‒ Was wholly or partly based on a mistake of law or of fact ‒ Was in all the circumstances wrong
‒ In the course of taking action a power was exercised for an improper purpose
exercised:
‒ Irrelevant considerations were taken into account ‒ Relevant consideration were not taken into account ‒ Reasons should have been provided
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 26
actions proposed to be taken with respect of matters and recommendations
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 27
ATO, TPB or other appropriate authority for further consideration;
recommendation, act or omission to which this section applies was based should be altered;
this section applies; or
recommendation, act or omission to which this section applies; The Ombudsman is required to report these findings to the authority concerned – the ATO or TPB
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 28
Inspector-General of Taxation | Taxation Ombudsman 22/11/2019 29
Inspector-General of Taxation | Taxation Ombudsman
2148 2251 2412 2712 2133 2195 2263 2827 500 1000 1500 2000 2500 3000 2015-16 2016-17 2017-18 2018-19
Complaints received and closed
Received Closed
22/11/2019 30
‒ Commonwealth Ombudsman (32) ‒ Australian Small Business and Family Enterprise Ombudsman (8)
‒ 1,183 (Category 0 – 2) 40% ‒ 1,803 (Category 3 – 5) 60%
Inspector-General of Taxation | Taxation Ombudsman 22/11/2019 31
Who is approaching us?
Inspector-General of Taxation | Taxation Ombudsman
Types of complainants and representation (cases received)
2017-18 2018-19 Individuals 66% 70% Self-represented 1376 1661 Represented 222 247 Businesses (Individuals and entities) 30% 24% Self-represented 535 490 Represented 182 153 Anonymous 4% 6% Self-represented 86 154 Represented 3 3 Other 0% 0% Self-represented 8 4 Total 2412 2712
22/11/2019 32
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman
75% 25% 69% 31% 0% 20% 40% 60% 80% 100% 120% ATO IGTO
Proportion of Individuals and businesses FY18
Individuals not in business Small businesses including sole traders Individuals Businesses (Individuals and entities)
Source: ATO Annual report 2017-18; IGTO 33
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman
5% 29% 95% 71% 86% 78% 85% 14% 22% 15% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% ATO - All lodgements** ATO - Individuals lodging* IGTO - Individuals lodging complaints IGTO - Businesses lodging complaints IGTO - All complainants Self-prepared Agent prepared Self-represented Represented
* Source: ATO Taxation Statistics 2016-17, Individuals 100 People statistics ** Source: ATO Taxation Statistics 2016-17, Cost of compliance table 2
34
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman
solved by the ATO directly … because they are tax specialists?
them and their clients?
want to pay for the service from their usual Tax Agent and in some circumstances?
35
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman
Company Funds Individuals Partnerships Trusts Self-preparer 5.68% 1.10% 9.26% 2.81% 1.91% Agent 94.32% 98.90% 90.74% 97.19% 98.09% 94.32% 98.90% 90.74% 97.19% 98.09% 5.68% 1.10% 9.26% 2.81% 1.91% 86.00% 88.00% 90.00% 92.00% 94.00% 96.00% 98.00% 100.00%
Source: ATO Taxation Statistics 2016-17, Cost of compliance table 2
36
Categories where no investigation notice is sent to the ATO Category 0 Complaints that are assessed and no further action is taken or contact is lost with the complainant. Category 1 Complaints that are able to be resolved through direct response by the IGTO including those which are referred elsewhere. Category 2 Complaints:
Categories where an investigation notice is sent to the ATO Category 3 Relatively simple complaints that are expected to be resolved in a timely manner. Includes cases where ATO and IGTO reach common understanding on the issues and options for resolution (known as “Referrals” by the ATO) as well as cases with minimal IGTO involvement (known as “Transfers” by the ATO). Category 4 Complaints that warrant direct and ongoing IGTO involvement. Category 5 Complaints that require the involvement of SES responsible for the subject of the complaint.
37 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman
AT ATO complaints received per financial year
(O (Open c cases m may c change c categorisation t throughout t the c case l lifecycle)
2015-16 2016-17 2017-18 2018-19 Category 5 10 22 26 5 Category 4 46 76 120 80 Category 3 1255 1201 1308 1291 Category 2 44 55 48 86 Category 1 558 581 521 740 Category 0 119 148 170 268 500 1000 1500 2000 2500 3000
No.
38 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman
AT ATO complaints received per financial year
(Open cases may change categorisation throughout the case lifecycle)
39 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman
(O (Open c cases m may c change c categorisation t throughout t the c case l lifecycle)
2015-16 2016-17 2017-18 2018-19 2019-20 Category 5 3 5 6 3 Category 4 22 19 27 33 29 Category 3 364 332 378 409 436 Category 2 21 18 29 35 Category 1 164 150 137 176 223 Category 0 31 47 37 79 90 100 200 300 400 500 600 700 800 900
No.
40 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman
AT ATO complaints received Q1 FY16 – FY2 FY20
Financial year Category 0 Category 1 Category 2 Category 3 Category 4 Category 5 Total No. % No. % No. % No. % No. % No. % No. % 2015-16 31 5% 164 27% 21 3% 364 60% 22 4% 3 0% 605 100% 2016-17 47 8% 150 27% 0% 332 60% 19 3% 5 1% 553 100% 2017-18 37 6% 137 23% 18 3% 378 63% 27 4% 6 1% 603 100% 2018-19 79 11% 176 24% 29 4% 409 56% 33 5% 3 0% 729 100% 2019-20 90 11% 223 27% 35 4% 436 54% 29 4% 0% 813 100% Total 284 9% 850 26% 103 3% 1919 58% 130 4% 17 1% 3303 100%
(Open cases may change categorisation throughout the case lifecycle)
41 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman
matter which has dragged out for 5 months and has given me a lot of stress and anxiety. I wish I had known more about this service provide by IGT.”
extremely effective resolution of this matter. Hopefully the ATO learn from dealing with you in the way they should be attending to their administrative function including when they get it wrong.”
improvements can be made to the operations of the tax office.”
Inspector-General of Taxation | Taxation Ombudsman 22/11/2019 42
Inspector-General of Taxation | Taxation Ombudsman
Views of IGTO’s complaints handling service Proportion satisfied Proportion dissatisfied Proportion neither satisfied or dissatisfied Overall satisfaction with the IGTO’s complaints handling service 65% 29% 6% Overall satisfaction with the
45% 44% 11% Professionalism of IGTO staff 82% 8% 10% Definitely Probably Definitely not Willingness to use IGT service again 55% 31% 14%
22/11/2019 43
A T O T P B I G T O
Ombudsman Function
Inspector- General Function
A A T
General Division Small Business Taxation Division
C
m u n i t y a n d P r
e r v i c e s
Law Firms Tax Clinics Community Organisations
C
m
w e a l t h O m b u d s m a n A N A O A S B F E O
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman
Further information Website: www.igt.gov.au Phone (non-complaints): (02) 8239 2111 Phone (complaints): 1300 44 88 29 Email: enquiries@igt.gov.au
44