The Australian Taxpayers’ Alliance has made a submission to the Federal Government Tax and Revenue Committee for its review of the 2015/16 Annual Report of the Australian Taxation Office. The submission from the ATA addresses the issues of fairness in the handling of cases by the ATO and calls for further measures to ensure procedural fairness for taxpayers as well as certainty for both tax payers and tax professionals in relation to the backlog of draft public rulings.
Whilst the ATA commends the ATO for implementing Key Performance Indicator (KPI) targets to address perceptions of fairness, there are still issues of fairness outlined in the submission such as the presumption of guilt that places taxpayers at a disadvantage when interacting with the ATO to resolve disputes. Likewise, the proposed one chance policy being proposed has the potential to create problems in encouraging auditors to circumvent the new policy by claiming reckless or dishonest behaviour to apply a 50% penalty where they might not currently. Furthermore, currently taxpayers can explain reasoning for that failure to the Tax Commissioner and request their discretion in waiving the penalty based on the circumstances and this ruling looks like it may also remove that avenue of appeal for taxpayers.
In addition to the fairness, more certainty is required for taxpayers and tax professionals and there is a backlog of draft public rulings and the submission calls for higher standards in the release of rulings in a timely manner to better enable them to properly engage with the ATO services and our tax system.
You can download the ATA submission here.