NSW RTPWG minutes, July 2011

7. Engaging taxpayers in our view of their risk profile and initiatives underway for small and medium enterprises

Margaret Plew and Neil McCallum from Small & Medium Enterprises (S&ME) updated the members on several projects the ATO is working on to pilot ways in which we engage taxpayers in our view of their compliance risk profile.

The presentation included PowerPoint presentations that are available from the secretariat on request. The main points of the presentation were:

• through the $100-$250 million engagement strategy the ATO and a Tier 1 Accounting firm initiated a series of exploratory projects around sharing the ATO view of a taxpayer's compliance risk profile.

The projects are:

• Risk Assessment Information Sharing [RAIS] - sharing the ATO risk profile with taxpayers in the $100-$250 million turnover range.
• Compliance Notification - written notification to very low risk taxpayers that the ATO accepts their income tax return for a particular year and considers it finalised.

The intent of these projects:

Through collaborative effort, we will achieve for our mutual clients and ourselves, a greater level of assurance and certainty, in real time, about their tax position and the inherent compliance behaviour of those clients.

The outcomes expected:

• Increased certainty for taxpayers and agents about the ATO risk profiling by sharing our view of their level of income tax compliance risk.
• Improved engagement with taxpayers and agents.
• Increased awareness of voluntary compliance choices.
• To demonstrate that our compliance activity is credibly based on a systematic and deliberate risk profiling method.

The benefits to taxpayers and agents will be:

• A better understanding of ATO risk management processes.
• Greater assurance regarding the ATO view of their tax affairs and what they can expect from the ATO.
• A more open and transparent relationship with the ATO.

Future plans

Risk Assessment Information Sharing (RAIS I I)

• We will conduct a broader pilot process involving a cross section of taxpayers and tax agents with a sample of up to 200 SME businesses.
• The pilot will test the client experience of taxpayers receiving the RAIS report and the impact on their tax agents.
• Timing of pilot - August - September 2011.

Compliance notification

• Extension of compliance notification to all eligible low risk taxpayers in the SME market.
• Development of criteria for identifying eligible taxpayers, a quality assurance process, and supporting business processes / systems to automate to the extent we can.
• Compliance notifications to be sent directly to taxpayers and tax agents notified of clients who receive one.

Meeting discussion

Members advised that they think that lower risk taxpayers would appreciate receiving a compliance notification from the ATO.

Sections within Agenda items

• 1. Introductions and welcome
• 2. Confirmation of minutes for the meeting of 14 April 2011
• 3. Action items from meeting 14 April 2011
• 4. Standard Business Reporting update
• 5. Changes to proof of identity procedures
• 6. ATO Tax Practitioners' Forum 5 August agenda items
• 7. Engaging taxpayers in our view of their risk profile and initiatives underway for small and medium enterprises
• 8. General business