Warning: This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
Headline issues
Responding to tax practitioner and community needs
Changes in economic conditions have placed pressure on the community and business, directly affecting tax practitioners as well as the services required by their clients. Tax practitioners have a unique opportunity to alert business to their tax and superannuation obligations in the early stages when businesses may find themselves in difficulty. The earlier we are aware of difficulties, the sooner we can assist tax practitioners to actively influence their clients to remain in the tax system.
When the community faces natural disasters such as floods and bushfires, we help tax practitioners and their clients to alleviate workloads and deal with tax matters when they are ready. We find ways to reconstruct records where possible and offer additional time to lodge and pay within the law. We demonstrated our commitment to this approach this year when we provided lodgment deferral relief to tax agents affected by natural disasters in Victoria, Queensland and New South Wales.
Practical assistance to encourage compliance
Tax practitioners
We are integrating our services for tax practitioners and providing a regional presence to support them.
Across Australia members of our regional teams, including relationship managers, support tax practitioners through visits and phone calls. Our online services give further support. We highlight compliance issues to tax practitioners and their clients to encourage early disclosures so as to avoid penalties. This year we will expand our Australia-wide consultations with tax practitioners by increasing the number of regional working groups from four to seven. This will enable a broad range of practitioners to provide a regional perspective on the business impacts of tax administration.
We offer key compliance information, as well as practical advice and support, through a range of dedicated products, including the 'tax professionals' area on our website, webcasts, email broadcasts, e-link, seminars, The Tax Agent magazine, Tax Agent Portal and our electronic lodgment service. We encourage intermediaries to use self service facilities so as to give us space to personally assist intermediaries and their clients on the more complex issues.
Guiding agents through technical issues is a key aspect of our work. We have senior staff in place to resolve issues that cannot be dealt with through our other services. Around 510 tax agents are registered to use our professional-to-professional program, seeking advice on topics such as GST property issues and trust losses. This service will continue in 2009-10.
This year we will focus on new registrants and help them become aware of and access our information and services. We will also provide information on obligations under the Tax Agent Services Act 2009 to help them understand the impact on them during the transition period.
Support for superannuation auditors
We continue to enhance the electronic superannuation audit tool (eSAT) that we made available to approved auditors of SMSFs last year. It assists approved auditors to perform the mandatory annual compliance audit of SMSFs and fulfil their reporting obligations.
Tax agent lodgment program
In consultation with the tax profession, we review the tax agent lodgment program annually, taking into account agents' workloads as well as legislative and revenue requirements. Tax profession feedback indicates that they want to continue the current lodgment program this year, in recognition of the current environment and challenges.
This year, we will explore with the tax profession initiatives to ensure the lodgment program responds to the changing needs of tax practitioners and the community. We will assist agents to get lodgment back on track. This will include negotiated, personalised approaches, incorporating outstanding current and future lodgment obligations, and remission or suspension of penalties.
This year the major change to the lodgment program is a concession to 31 July 2009 for early balancing December substituted accounting period (SAP) entities who lodge electronically. This concession recognises that software may not be available in time to lodge by the due date. It will assist agents who lodge income tax returns for companies and funds electronically. In addition, we will not apply penalties for failing to lodge on time to early December balancing SAP entities when their 2009 return is lodged electronically by 31 July 2009. The payment is still required on 1 June 2009.
Self-managed superannuation funds
This year we will continue our work to optimise voluntary, on-time, accurate SMSF lodgments. We will follow up outstanding lodgments of new registrants and SMSFs that perpetually fail to meet their lodgment obligations.
Approved auditors play a key role in maintaining the health and integrity of the superannuation system. This year we will:
- provide 'help to comply' tailored guidance for those new to the SMSF audit role
- undertake around 1,000 audits and reviews to gain assurance that approved auditors of SMSFs apply auditing and professional standards and competently meet regulatory requirements
- review large auditing practices to provide assurance that they have effective internal controls to deliver high-quality audits across their large client bases
- work with professional bodies to manage risks and enhance and promote support products including eSAT
- improve our data, intelligence and risk analysis processes for approved auditors.
Changing regulatory environment
Tax Practitioners Board
This year both the regulatory environment for tax agents and BAS agents and the role of the Commissioner will change significantly. The Tax Agent Services Act 2009 establishes a national Tax Practitioners Board, which will have sole authority for the registration of tax agents and BAS agents. The new Board has general administration of that Act.
Key elements of the new regulatory regime include a legislated code of professional conduct and power for the Board to apply for civil penalties for certain misconduct by registered and unregistered entities.
The Board and the Commissioner will both play an integral role in administering the tax system in terms of promoting a capable and well-regulated profession and greater consumer confidence.
We will continue to work with the tax profession to design products and services for tax agents and new BAS agents.
We will focus on:
- developing a collaborative working relationship with the new national Tax Practitioners Board
- providing administrative support to the new national Tax Practitioners Board to help implement the new regulatory framework
- ongoing support for the state-based Tax Agents' Boards during the transitional period.
The new regulatory arrangements will commence on a date to be fixed by parliament. The new Board will have responsibility for the registration and regulation of all tax agents and BAS agents and investigation of unregistered preparers. Until then, we will continue to lead investigations into the activities of unregistered entities. When the transition takes place, the ATO will support the Board to deal with non-compliance by developing complementary protocols and procedures. This will help ensure the integrity of the tax system as well as high levels of consumer protection.
Ongoing assurance and integrity
The threat of fraudulent activity and use of unregistered tax agents offering seemingly attractive returns poses a risk to the integrity of the tax system, and a competitive disadvantage to agents that adhere to their professional standards of conduct.
This year, we will focus on identifying unregistered tax return preparers and ineligible BAS preparers. We will refer them to the current state-based Tax Agent Boards or seek to prosecute cases for breaches of the Taxation Administration Act. When the National Tax Practitioners Board is operating in 2010, we will work with the Board to ensure breaches are appropriately actioned.
Ensuring the integrity of tax practitioners is a priority for us. Those who do not meet standards are quickly identified and action is taken. We review returns and activity statements lodged by tax practitioners to identify possible frauds or scheme promotion including illegal early release of superannuation funds, and prosecute the more serious breaches of the law. We also review the personal tax obligations of agents.
This year, our compliance activities for practitioners will focus on:
- the accuracy and integrity of income tax and GST refund claims
- promoted tax exploitation schemes
- tax agents' own compliance with taxation obligations.
Tax practitioner integrity service
We review and respond to complaints from the tax practitioner integrity service telephone line. This year, we will follow-up on complaints against registered BAS agents as they come under the auspices of the new national Tax Practitioners Board.
This service allows us to identify behaviours before they become significant, acting as an early warning indicator that complements our broader compliance strategies. Matters may be referred to the new Board, which will have an increased range of sanctions and responsibility to determine if the new code of professional conduct under the Tax Agents Services Act 2009 has been breached.
Promoted tax exploitation schemes
The tax profession plays an important role in ensuring the integrity of the taxation system. We encourage tax practitioners to be aware of their responsibilities under the promoter penalty laws and to ensure reasonable governance practices are in place to reduce the likelihood of contravention of these laws.
Where a potential tax exploitation scheme is identified, we encourage practitioners to contact us. Reporting dodgy schemes to us could prevent an agent's clients from being caught up in an inappropriate scheme and stop promoters from gaining an unfair advantage in the marketplace. The laws provide civil remedies, such as enforceable voluntary undertakings, injunctions,
and/or penalties to deal with promoters of tax exploitation schemes.
Sections within Tax practitioners
Last Modified: Wednesday, 5 August 2009