The SEQ RTPWG is a sub-group of the ATO Tax Practitioner Forum (ATPF) and as such members of the RTPWG may be required to provide comments or views on ATPF agenda items.
Refund Integrity Update
The following has been extracted from the briefing note provided to the ATPF at the meeting held on 4 November 2011. This topic was again on the agenda for the meeting held on 24 February 2012.
Purpose
To provide the ATO Tax Practitioner Forum with information as at 4 November 2011 regarding the Refund Integrity Program.
Update on performance
Since 1 July 2011, we have stopped over 94,000 returns with total refunds of around $390 million believed to include overstated claims or to be potentially fraudulent. Of these returns over 34,000 returns have been prepared and lodged by registered tax agents (total refunds of $146 million).
We use various risk models in our systems to identify these returns. Each return stopped has been identified as containing some information that requires verification prior to issuing a notice of assessment. As data supplied by other parties continues to become available (such as payment summary information from employers) we regularly re-examine these returns.
To date we have released over 17,600 returns where we have been able to verify the information contained in the return that was unavailable at the time of lodgment (that is, without provision of additional information/substantiation).
For those returns where this type of verification is not possible we are issuing review letters to taxpayers or their tax agents asking them to provide supporting documentation for their claims and where appropriate a satisfactory explanation as to how their claims relate to their income earning activities.
Tip 1 - When responding to our review request, include your client's name, tax file number and our reference on the cover sheet
This will help minimise the delay in attaching your response to the taxpayer's account.
Action being taken
ATO Compliance staff have visited 80 registered tax agents where more than 50 returns are held for review.
We have published a guide to assist taxpayers to provide relevant supporting documentation if they receive notification of an income tax review.
To date, over 29,500 reviews have commenced or are currently with compliance officers with the review letters about to issue. Nearly 19,000 reviews relate to tax agent lodged returns.
6,100 calls have been received in response to the audit letter issued. Over 90% of calls are being answered within five minutes. We have listened to feedback from tax agents to our client service representatives and we have responded by removing some work-related expense labels (when the total claim is less than $300) from the income tax review.
At this stage, results show that over 80% of stopped returns have been adjusted prior to notices of assessment issuing. This has resulted in a reduced refund or an increase in the amount of tax payable. In many instances a penalty has also been imposed. Registered tax agents who do not comply with the legislated Code of Professional Conduct (as outlined in the Tax Agent Services Act 2009) will be referred to the Tax Practitioners Board for investigation.
Tip 2 - Return your information to the address shown in the review letter
Return your information to us by:
- faxing it to 1300 136 452, or
- mailing it to:
Common issues that we have identified
Some of the common issues identified include:
- understated income or taxpayers claiming fictitious PAYG Withholding credits without working for an employer
- overstated or fraudulent deductions
- non entitlement to claimed rebates and/or offsets, for example spouse offset, education tax refund and refund of franking credits
- non entitlement to a Medicare levy exemption
- non residents claiming to be residents for tax purposes
- instances of identity takeover.
We have also been effective in engaging intermediaries. Our alerts have resulted in some 'dob-ins' from registered tax agents, some of which have been confirmed as identity takeover. These have included agents with large client bases.
When can you expect your refund?
To date, we have received nearly 10,000 responses to our review letters. Once all relevant information and supporting evidence has been received we will endeavour to complete all reviews within four to six weeks of the reply due date on the audit letter. If you have not received your notice of assessment, or you have had no contact within six weeks from the reply due date, please call 13 28 61 requesting the progress of your return.
ATPF meeting - 24 February 2012
Minutes of the meeting held November 2011, and agenda papers for the February 2012 meeting were not available at time of distribution.
Sections within Agenda items
Last Modified: Wednesday, 23 May 2012