Tax Profession Digital Implementation Group key messages 1 April 2022
Welcome and introduction
Co-chair, Assistant Commissioner Melanie Casey welcomed attendees and asked that any conflicts of interest be declared, none declared and reminded the group of confidentiality requirements.
Melanie welcomed new member representatives Jason Robinson for CPA Australia, and Andrew Shead for The Tax Institute.
Melanie thanked Mike Behling for taking on the co-chair role for the group and acknowledged and thanked Mark Morris for his engagement and contribution while in the role.
Environmental scan discussion
Members were invited to provide insights into issues, trends and concerns about the digital landscape and year ahead. Common feedback and key themes have been summarised below.
Digital service providers (DSPs)
DSPs expressed some nervousness regarding tax time preparation and product development due to the delay with tax time specifications.
Single Touch Payroll (STP) Phase 2 is a major focus, with a significant deferral program to prepare for. These differing deferral dates are anticipated to have a significant impact on the agent community.
The change of formats for intermediate data format (IDF) files is a major change requiring substantial development time.
Communication is required to inform clients of changes to interest prefill, which will require commentary to be included for any prefill figures being amended.
Tax practitioners and professional associations
Members highlighted that 2022–23 budget announcements with a digital focus may not deliver efficiencies to practitioners, also noting that many measure benefits will not be realised until future financial years. Practitioners are interested in more information on the digitalising of trust income reporting and processing.
Members raised concerns on the effectiveness of the communication campaign for STP Phase 2 and engagement with the small business community. There is concern that incorrect reporting will ultimately impact on the integrity of data.
Research and development schedules and IDF have been a consistent challenge when lodging, especially where there are blanks and zeros.
There is concern that the country-by-country (CBC) reporting data will be late, impacting the lodgment of income tax returns for impacted clients.
Members queried whether deferral requests via online services for agents would be available before tax time. The ATO confirmed that although progressing, this functionality would not be available.
The ATO acknowledged and captured all other insights and information obtained through the discussion and will disseminate as relevant to ATO stakeholders for consideration.
Tax professionals digital services roadmap concept
Assistant Director Mallory Wuthrich discussed key findings from recent consultation on developing a ‘Tax professionals digital services (TPDS) roadmap’ . Members were provided with a comprehensive report of the findings in the meeting papers.
The TPDS roadmap concept was recapped for members emphasising that it was envisioned as an online, sortable and regularly updated forward plan of the digital services being developed for tax professionals.
Consultation was held with a range of tax practitioners from different practice types, sizes and locations with the intent to gain insight into:
- their interest in this resource
- the types of information it should contain
- the potential value proposition of this resource for tax professionals.
Feedback indicated that a TPDS roadmap would provide value to tax professionals, improving transparency in what is being delivered and delivery timeframes, identifying opportunities and providing the ability to plan ahead for changes. It was highlighted that it needed to be a trusted resource, and patterns of delays and slippages would reduce confidence in the resource.
- What sort of projects would be included on the roadmap?
The ATO advised that the concept is still in the early stages of development and items to be included will be determined in consultation and co-design with tax professionals and TPDIG members.
The aim is to include the services that directly impact agents, but also possibly those that impact their clients. The roadmap should include only endorsed items so that it remains purposeful and functional rather than a list of potential projects.
- It was noted that tax practitioners may query how the roadmap ties in with practice software.
The ATO explained it has been working closely with the Digital Partnership Office (DPO) to consider and understand aspects relating to this. Further insights from research undertaken by the DPO will be shared with members.
Cyber Security Stakeholder Group
- This item was held over until the next quarterly meeting due to presenter availability.
Insights from tax professionals – consultation sessions
Assistant Director Jason Stewart updated members on the work being undertaken to understand the cyber security landscape for tax professionals.
Further work to understand the cyber security landscape, resources available and what or where people turn to for guidance has progressed. Consultation with practitioners from a range of practices sizes was conducted in the form of one-on-one interviews exploring these aspects of cyber security.
A report on findings is currently being drafted, however the consultation was encouraging and identified that all practices engaged had some form of cyber security regime in place.
A common theme was the ability for practitioners to understand all the options that are available, noting the volume of sources and content available on the topic. This also highlighted the need to emphasise in communications that cyber security is a collaborative responsibility, with many partners within the ecosystem playing a role.
An important insight gained from the consultation was the need to be conscious of the various levels of capability and sophistication of cyber security regimes in place within the smaller practices and the comparative human and financial resourcing available.
- Risk strategy is mandatory for professional association membership requirements and should include cyber security.
- A professional association member confirmed that cyber security was covered in their association’s requirements, and recommended a requirement be included in the terms and conditions for use of online services for agents.
- A member advised that they have had clients who had experienced identity fraud and suggested a ‘checklist’ of what someone needs to do would be useful.
- A member advised that it was the practical ‘how to’ guidance that would provide the most support to practitioners, that is , how to prepare, how to respond.
Members were thanked for their contributions and advised that a further update will be provided at the next TPDIG meeting.
ATO and TPB client verification guidelines
Director Ben Spargo led conversation on the release, adoption and embedding of the prescribed minimum standards to minimise risk of identity theft and fraud.
The prevalence of identity harvesting techniques and attempts to illegitimately obtain identity information, with instances of employee infiltration and poorly guarded myGov information was noted.
Key points included:
- The ATO strengthening client verification guidelines is part of the Tax Practitioners Board (TPB) and ATO’s transition towards mandating minimum standards of client verification.
- The ATO will continue to consult with the TPB and the tax profession before mandating these minimum requirements.
- Practitioners are encouraged to adopt these standards on a voluntary basis before they become mandated.
- There is some work progressing regarding a potential digital solution, however this is in the early stages and further engagement with tax professionals will occur in due course.
- The guidance notes were published in late January and have been supported by a media release, web content and discussed in various engagements held with practitioners.
Members were canvassed for potential issues on aspects of the changes:
- Implementing client verification will represent a change for some practitioners who have not historically undertaken this within their practice.
- Recording of client verification will require some form of adjustment for most practices (recording of the verification being undertaken versus recording what identity documents were sighted).
- Conversely, some practices will have to cease storing copies of identity documents, representing a change.
- Saying no to accepting a client might be new for some agents.
- Understanding how to apply the requirements in a digital interaction (best practice when practitioners are unable to meet a new client in person).
- Could be any kind of verification assurance included in software?
Several DSP members confirmed that they have included something in their products to capture client verification, with some seeking to build it into their API. It was noted that the lack of a mandatory start date has meant the item has been picked up in a haphazard way by DSPs, which creates additional challenges with respect to data transfer.
- Are there any specifications that would be provided to DSPs to help ensure their products are meeting the requirements?
A DSP member confirmed that there were no specifications at this time, only some suggested field names, which were useful.
- Will the mandatory commencement date be within the next 12 months?
The ATO advised that the mandatory date was unable to confirmed at this time, noting that the TPB Practice note has been released and requires practitioners to apply and be compliant currently.
Members were thanked for their contributions and advised that further engagement would occur.
Digital channel guidance tool
Assistant Director Laurel Griffin led conversation regarding the digital channel guidance tool. Members were provided a copy of the channel guidance tool overview and guide scorecard in the meeting papers.
The tool is intended to assist ATO decision makers in determining whether the delivery of a new digital service should be via ATO retails systems, offered as a wholesale solution to DSPs, or both. The tool uses different lenses to consider questions (user experience, DSP, government and community expectations).
A major driver in the development of the tool has been the desire to bring greater visibility and transparency to the decision-making aspect of the process and to deliver defensible, evidence-based outcomes.
The ATO welcome suggestions on the questions included in the tool and encourage members to provide feedback.
- Members indicated that the move toward greater transparency in the decision-making process and early engagement with a range of stakeholders is the right move and is supported.
- There is a sense of nervousness that services may find themselves on myTax before practitioners are able to undertake the same.
- It was noted from a practitioner’s perspective, if the change has a significant impact, the preference is to release via software. It was further highlighted that channels from an individuals and business perspective should be in a format that is easily accessible regardless of technological or financial capability.
- Is it possible the ATO to approach the build of a tool or product as if it were to deploy into wholesale, even if initially intended for retail?
The ATO advised that the channel selection process is informed by the functionality and the way ATO operating systems such as the Integrated Core Processing (ICP) system manage tasks, making it a more complex process to make deployment determinations.
The ATO emphasised that the tool is about limiting the chances of pursuing a pathway that locks in a specific solution and will aid the ATO in making considered decisions around what the most efficient and effective channel to use.
- Where in the project engagement plan (for digital services or products) the channel guidance tool would be used, emphasising the importance of early engagement when the ATO has identified a problem.
The ATO advised the tool was intended to be used early in the discovery and conceptualisation phase of a project. For example, if an IT or project group attempts to access funding to develop a digital service or solution, this tool will need to be used.
- A member identified that there was no specific reference to the tax practitioner community in the documentation provided with the meeting papers and requested the inclusion of a specific reference be included.
Statement of intent and membership changes
This item was held over until the next quarterly meeting to allow substantive ATO co-chair Assistant Commissioner Kerry O’Loghlin to lead the discussion.
Other business and meeting close
Enterprise Client Register project
The following written update was tabled to members:
- The Evolution of the Client Register project is pausing its focus on technological change.
- The project will be continuing to gather further insights and develop a strong evidence base to support future solutions, that will be co-designed with the tax profession. We have planned to concentrate our first round of consultation on integrity and purpose, as well as gaining a contemporary understanding of drivers and irritants of the tax and broader intermediary professions. We will be exploring the risks associated with incorrect client details and seek to understand how future change may impact the tax professional experience and data integrity.
- Current timeline for consultation is to commence in April 2022. We will look to reengage with Tax Practitioner Stewardship Group (TPSG) members before the end of the financial year to share our findings and next steps.
- A member emphasised the importance of early engagement and the facilitating of discussions with tax professionals with respect to the budget announcements.
- Members indicated support for the principles and strategic direction presented, emphasising that early engagement with practitioners and providers is essential to the effective co-design of solutions.
- A member indicated there was an opportunity to improve the guidance and communications regarding the linkage between myGov and Online services for agents.
The ATO advised that discussion regarding better internal linkages and communication has been progressing.
- A member highlighted that the broader tax profession still may not understand or appreciate the distinction between the many systems in use (many systems to those who administer versus one system to the users).
The ATO advised that there is an effective presentation that covers this and will include it on a future agenda for the TPDIG.
- A member acknowledged the discussion and highlighted that the ATO are quick to provide messaging when systems were not working and encouraged people to subscribe to alerts.
Members were thanked for their contributions and the meeting was officially closed.
Information about the key topics discussed at the Tax Profession Digital Implementation Group meeting 1 April 2022.