Tax Profession Digital Implementation Group key messages 12 November 2020

Welcome and introduction

Acting co-chair Assistant Commissioner Sylvia Gallagher welcomed attendees and asked that any conflicts of interest be declared and reminded the group on confidentiality requirements.

The following changes to membership were noted and new representatives welcomed:

• Janet Lucas representing KPMG
• Elinor Kasapidis representing CPA Australia.

Co-chair Mark Morris reflected that it had been a challenging year, and this had driven a lot of digital change for the tax profession and tax practices. He noted that in the first meeting for 2021 it was tabled to discuss the joint digital future of the ATO and tax profession, with a focus on vision and clarity on projects planned for the next two to five years.

Communication preferences

Director Mark Ayers provided an update on ATO outbound communications preferencing in Online services for agents (OSfA). The ATO is looking for opportunities to continually improve the ATO outbound communication experience. Public release of communication preferences into OSfA occurred in March 2020.

Over 10,000 agents now interact with the feature and over 500,000 clients had preferencing for correspondence to be delivered digitally through the feature. Feedback from agents was favourable, with most agents finding the functionality intuitive and easy to use, noting it assisted practices to transition easily to the digital solution in the COVID-19 environment.

To set up a communication preference a practitioner must be appointed by the client as their registered agent and have the clients written authority to set the communication preference.

The ATO plans to release a suite of Application Programming Interfaces that will allow communication history and communication preferences to be made available through the wholesale channel and enable where functionality can be incorporated into agent practice software.

The ATO legal and cyber security teams are working to determine what identifiers can be included on ATO emails and SMS messages that will easily identify the client without breaching the client’s privacy. Email and SMS are not secure channels and therefore TFNs cannot be used in these channels.

These guidelines are currently being reviewed and will look at potentially expanding the circumstances under which some identifiers may be used in email and SMS messages without breaching a client’s privacy or increasing the risk of identity theft and scams.

Tax professionals digital services strategy

Director and Program Lead Laurel Griffin acknowledged there has been a significant digital change for tax professionals over the last few years, with major transitions such as the electronic lodgment service to practitioner lodgment service (PLS) project, the replacement of the tax and BAS agent portals with OSfA and the AUSkey to myGovID transition.

With tax professionals focussing on supporting their clients and navigating their practices through COVID-19, the ATO recognises stability and support is a priority.

Members were provided with a detailed overview of the ATO’s proposed approach to digital services for tax professionals for the next 12 months and beyond, which will focus on four key streams:

1. Consolidation through education – assisting agents optimise their understanding of existing digital services, through promotion of self service, increase in practice productivity and online security control, digital identity.
2. Strengthening the security of the digital eco-system – intention is to improve safety and security to increase the resilience of the eco-system.
3. Facilitating improved client reporting – through enhancing prefill data. A good example is the new online BAS check, where real time messaging as BAS is being prepared. Digital substantiation is another initiative, flagging where there is a high risk and alerting agents' substantiation will be required.
4. Continued integration of ATO digital services into agent practice software.

The ATO highlighted that the proposed approach is to work together with tax professionals and digital service providers with four main guiding principles:

• research and evidence
• being transparent and sharing plans
• co-design and seeking input and feedback on proposed changes
• accountability through the assigning of roles and responsibilities.

Members provided their initial thoughts on the proposed strategy and agreed to discuss and co-design each of the four key streams in more detail at subsequent meetings in 2021.

MyGovID and Relationship Authorisation Manager (RAM) post implementation update

In March 2020 myGovID and RAM successfully replaced AUSkey. The transition has exceeded expectations on all indicators including client adoption and usage, reduced escalations compared to AUSkey and increased security when accessing government online services.

As at 1 November 2020 the usage rates of the Digital Identity solution include:

• over 2.3 million downloads of the myGovID app
• over 1.7 million users have setup their myGovID
• exceeded 1.8 million authorisations established in RAM
• over 1.2 million unique ABNs linked in RAM
• over 70 million authentication events have been facilitated by myGovID and RAM to enable businesses to access online and machine-to-machine, for example Standard Business Reporting services.

Assistant Commissioner Ben Foster provided the group with an outline of work achieved and uptake/usage rates of myGovID and RAM, as well as providing details on future deliverables under the Digital Identity Program.

There is a private beta in progress for individuals to connect their myGovID to their myGov account to log-in and access ATO Online services for Individuals. This will become a public beta in December 2020, followed by planned improvements in 2021. The delivery for this program of work and reaching milestones has been on time and within budget.

The next stage for myGovID is to develop face verification technology to provide a higher level of assurance on who owns the identity (IP3), protecting your ID and your personal information, and allowing you to do more online in the future.

Some services will mandate IP3, for example, high risk and or commencement of identity (online TFN application service). For other services facial verification will not be mandatory but optional for those who want to strengthen their myGovID

The group discussed how myGovID has supported flexible working practices and access to stimulus measures for small business during COVID-19. Members advised that having the ability for staff to work remotely and have access has greatly helped during COVID-19, thanking the ATO.

Members' comments

Members raised an ongoing issue when agents are logged into OSfA they are timed out within a short timeframe and noting the frustration caused by having to login again via myGovID. Member requested if the time out period can be extended in OSfA. Members also raised that they are often ‘booted out’ of OSfA due to poor Wi-Fi connection and then struggle to log in using the myGovID process.

Enhanced prefill for Tax Time 2021

Director Matthew Musolino provided members with an overview of enhancements to bank interest prefill data for Tax Time 2021.

The ATO are looking to improve the sharing of data with agents from prefill, providing agents with a key indicator to alert the agent to high confidence data. This will allow the agent to compare clients interest records with prefill records, giving the agent greater certainty of the data expecting to be reported by the ATO.

This solution takes a more preventative approach making the data transparent to agents to make it easier for them to fulfil the clients’ lodgment obligations the first time.

It aims to prompt agents to have a conversation with clients and determine if they want to challenge the information in prefill. Where the ATO have confidence in the data, if the client chooses not to amend the return the ATO will adjust the return or assessment to include the prefill interest amount.

Where the client feels as though there is a discrepancy and agents make changes to the prefill amount, PLS will prompt agents to have that conversation with their client. Auto compliance program will ask why you want to delete or minimise the interest amount. If the figure is not the same due to an adjustment, then an adjustment reason is required before the lodgment will go through successfully.

The lodgment experience remains unchanged for agents that currently rely on the prefill data.

The ATO are ultimately looking for an increase in correct reporting and will look for other data transparencies to see what other enhancements can be made available in future.

Members' comments

Members advised that agents have lost confidence in the errors coming through via prefill flagging and this causes frustration.

The ATO recognises that by taking this corrective role and including the interest on returns and making it clear why the interest amounts were included it is providing transparency up front and reduces future objections.

One of the key benefits is it provides certainty upfront, if the client wants to challenge there are channels to tell the ATO and this will speed up processing time.

2021 forward work plan

Co-chair Mark Morris advised the group that co-chairs propose to dedicate a session at the first meeting in 2021 to discuss the group’s strategic direction and provide visibility of where the group is heading into the next 12 months to two years.

Members were asked to think about challenges in the system and potential topics of discussion for the first meeting in 2021 including:

• What issues and areas are the profession concerned or talking about?
• Do members have any concerns about the future direction of the profession and how may this relate to future digital strategies?
• What is the future digital journey for the profession and what role does this group have in this journey?
• Business continuity management and contingency planning.

Members acknowledged that practitioners spend a lot of time developing practice processes and automation impacts on these and the efficiencies within their practice. Skill sets that staff will need to accrue also need to be considered in line with digital developments.

Members noted that it would be good to also discuss some misconceptions about digital and system changes and the limitations, collaboration, resources and time needed to proceed with changes.

Assistant Commissioner Sylvia Gallagher advised that after the initial discussion on the group’s strategic direction, it is proposed to discuss each of the pillars within the Tax professionals digital services strategy in more detail at subsequent meetings. This would involve discussion and co-design on aspects of education, security, improved reporting and the integration of practice software.

Other business

Assistant Commissioner Martin Mane provided background on the Modernising Customer Verification program of work. He noted that in the last six months there had been a sharp uptake in identity fraud, with some agents being targeted in conjunction with the introduction of the COVID-19 stimulus measures.

The ATO has been consulting with a small working group of Tax Practitioner Stewardship Group (TPSG) members and professional association representatives to co-design the approach for the tax profession.

Feedback provided by the working group for consideration in the design of the approach to date has included:

• The intention was to mirror the approach implemented for the Superannuation industry, however the group highlighted that agents have very different processes in place, depending on the agent type and their business model.
• Some agents are struggling due to COVID at present, so any additional costs or workload with the implementation would not be favourable.
• Any solutions need to address the risk and that all good agents will adopt the changes, but bad agents would continue with bad behaviour.

The ATO are looking to make customer verification easier for clients and are being mindful not to make significant changes to agent practice processes.

Also being considered is how myGovID may be used in the processes and how it can make the customer verification process easier by leveraging off existing myGovID verification. The next working group meeting is scheduled for the end of November 2020 and this will be discussed.

Members were invited to send any questions on Modernising Customer Verification through to the TPSGThis link opens in a new window mailbox.

Attendees

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