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  • Legal Practitioner Annual Round Table - 2 August 2018

    The Legal Practitoner Annual Round Table met on 2 August 2018

    Intermediaries experience - now and into the future

    The ATO talked about working with the profession to validate the current experience they have with the ATO, including any irritants. The ATO also spoke about how to better connect with the profession through activities similar to recent presentations with the Queensland Bar Association and the Queensland Law Society.

    The work that is currently being undertaken by the Intermediaries Future initiative within the ATO will complement that of the Legal Practitioner Round Table. The Round Table can be the avenue through which consultation can occur with the profession in a broader sense. Members expressed willingness to be involved with any work going forward.

    Deputy Commissioner Debbie Hastings highlighted the importance of looking at the experience of legal practitioners from a whole of ATO perspective which will help lift their profile within the ATO.

    Members raised how best to provide feedback on the value and effectiveness of their interactions with the ATO – particularly after they had been directed to an area or officer following their initial enquiry with Review and Dispute Resolution. Feedback from members is encouraged - specifically a post-action review on what happens once their issues are moved from Review and Dispute Resolution to other areas of the office. This feedback can be provided directly to the Legal Profession Management team within Review and Dispute Resolution.

    Authorised contact

    Members raised issues they were having with the authorisation process for legal practitioners who take on new clients. This involves the legal practitioner being noted on ATO systems as the authorised representative for the taxpayer. The ATO's Enterprise Work Management, Service Delivery line, discussed using the existing Business Portal as an interim solution to allow for an electronic receipt of authorisation forms.

    It was acknowledged that the Business Portal was not built for these purposes. However, this mechanism could provide an electronic portal for the ATO to receive these forms (removing the need to use facsimiles). If this mechanism could be successuflly deployed, this would likely reduce the current service standard of 28 days to 15 days. With further work by the ATO ‘behind the scenes’, the ATO is confident it can automate the process of authorising contacts, which would then decrease times substantially to a three day service standard.

    For those requests that require system access within 24 hours on an urgent basis only, these can continue to come through the Legal Profession Management team in Review and Dispute Resolution for actioning. The ATO expects that this would be a rare occurrence.

    As a result of further activity subsequent to the meeting, legal practitioners can now lodge their authorisation forms using the Business Portal. However, there are some prerequisites for practitioners to meet before they can use this service.To lodge, practitioners need to:

    • register for an AUSkeyExternal Link to use the portal.
    • provide mail permissions via Access Manager
    • log into the business portal and select Mail > New Message > General questions > Notify ATO of appointment of new public officer
    • attach a scanned completed copy of the nomination of legal representative form.

    The ATO will provide some information and education to the profession around registering for an AUSkey and to promote this service. For more information on using the Business Portal (including how to register for an AUSkey) go to:

    Longer-term, the ATO plans to use the ATO Online environment for intermediaries which includes legal practitioners. This initiative is currently being worked on and is not expected to be available until 2020.

    Members also raised the issue of access to the Business Portal being restricted to one desktop machine. Access from other devices is available - go to Manage ABN Connections and follow the steps to set up another device(s). Practitioners can also set up access for their staff.

    Phoenix activity

    The ATO’s Private Groups and High Wealth Individuals (PGH) business area has designated teams who specifically deal with illegal phoenix activity. However other business areas are also involved in this work.

    Phoenix activity operates in a task force environment. The Phoenix Taskforce operates under a co-ordinated and strategic approach to dealing with illegal phoenix activity. The taskforce provides a whole-of-government approach working alongside other government agencies such as ASIC, Department of Jobs and Small Business and the Fair Work Ombudsman.

    PGH acknowledged that 'phoenixing' is determined by the behaviour exhibited, and there was no specific definition. There are some law reform measures that the Government has announced that will help to support the compliance activity in the phoenix space - one of these measures is the proposed introduction of the new Phoenix Offences. The current focus is on what the ATO considers to be ‘illegal phoenixing’ and that involves activity that is multiple and cyclical – designed to avoid paying debt and amounting to breaches of ASIC rules.

    PWC undertook a report, The Economic Impacts of Potential Illegal Phoenix Activity, which estimates the economic impact of illegal phoenix activity on business, employees and government. Specifically the report estimates the annual direct impact of illegal phoenix activity to be between $2.85 billion and $5.13 billion.

    Members questioned whether the Commissioner’s role with respect to liquidations will change. The role to date has not been large once a liquidator is involved. The ATO's Debt area responded that there would always be some activity that the ATO would want to be involved in and it may be the case that the ATO would fund liquidators.

    General update from Debt

    Improved service offering

    Members of this group raised concerns at the Legal Practitioner Round Table meeting held in 2017 about contacting Debt with respect to certain matters. In February 2018 the Debt business line implemented an improved service offering for legal practitioners. Currently there have been an average of three to four referrals per week. The turnaround is two business days and Steven Barbara (Debt) confirmed that matters are being resolved within one day.

    The escalation service is available to legal practitioners where you are acting on behalf of your client in relation to:

    • Director Penalty Notices (DPN’s)
    • S459e Statutory Demands
    • Windup Notices
    • Judgement Notices
    • Summons
    • Creditor’s Petitions, or
    • Bankruptcy Notices.

    This service is ONLY available in instances where:

    • there is an error in a document/notice, or
    • there is less than five (5) business days for a response.

    To access this service, contact the Debt area on 1300 303 570 and select the appropriate subject matter option. When speaking to the ATO officer advise them that you believe you are eligible for this escalation service. If eligible, the ATO officer will then create an escalation request. You will then be contacted by an ATO officer who specifically deals with these matters within two business days.

    Risk profiling and debt

    Concerns were expressed by members about the inconsistency of transparency in relation to decision making at the case officer level, for example when issuing garnishees. Members would like more transparency around what risk factors are taken into account and early engagement with the debt case officer to discuss these. This would allow them to explain the situation to their client and reset their expectations or alternatively narrow the issues in dispute.

    At present, some debt officers provided the information freely while others would not comment and invited the practitioner to lodge an FOI request to obtain the information they needed.

    Assistant Commissioner Steven Atkins indicated that he would be prepared to receive direct feedback from any members who are experiencing issues if they believe they are not having the decisions and factors sufficiently explained. This relates to those high risk debt cases of which the ATO has about several hundred every year.

    Dispute resolution and prevention

    Update on Independent Review - small business pilot

    The group were provided an update on the Independent Review – small business pilot which came into effect on 1 July 2018. The initiative received positive feedback from members, however it was noted that the legal community were not really aware of it. To get more take-up of the service, members suggested that promotional material should be clear about the possibility for the Independent Review overturning an audit decision. In addition penalties/interest should form part of the review – the ATO acknowledged that they had received similar feedback from other sources but at this stage had not included penalties and interest so as to provide a similar service for comparison purposes for small business as that offered to the large business market.

    Independent Assurance of Settlements (IAS)

    Introduced in the 2016-2017 year, the IAS provides assurance on settlements undertaken by the ATO in the large market. We have received positive feedback from the assurers and the Australian National Audit Office (ANAO) about this initiative. The ANAOExternal Link made some recommendations which have since been implemented. The ATO is currently exploring the possibility of broadening the IAS program beyond the large market settlements.

    Current policies on conferences, mediation and In-house Facilitation

    The ATO addressed concerns expressed by members about case officers not proceeding to settlement on the day of an In-house facilitation (IHF) session or settlement negotiation. It was noted that in all Alternative Dispute Resolution meetings there must be a decision maker present or at least be contactable by phone. PS LA 2013/3 Alternative Dispute Resolution (ADR) in ATO disputes provides clear instructions for officers.

    Some ATO business lines have settlement panels and others do not. Where a panel is required, any settlement case should go to the settlement panel before a settlement meeting or ADR process – the panel will advise on the parameters on which to settle.

    IHF can be directed to different issues and is not always directed towards settlement (for example, narrowing of facts in issue, addressing process issues). It may be difficult for a case officer to agree on the day of an ADR process to a settlement if the proposal to settle is first raised by the client at that process. Court or Tribunal directed ADR processes occur in accordance with the rules of the Court or Tribunal.

    For more information go to ato.gov.au and the options for resolving disputes.

    Test Case Litigation Program

    The Test Case Litigation Program is celebrating 25 years of operation. The legal and accounting professions have greatly contributed towards a number of recent improvements to the Program including streamlining funding criteria and expectations, simplifying the deed and refreshing the webpage. The Program welcomes any questions about the funding process and ongoing feedback.

    More information on the Program and current test cases can be found at either the Program's website or by email at testcaselitigationprogram@ato.gov.au

    The profession noted test case funding criterion and expectations and asked how matters are determined as impacting on a substantial section of the public. The funding decision process was briefly explained and reference was made to the Test Case Litigation Register which summarises the test case funded issues impact on other taxpayers.

    Treatment of objections received by legal practitioners

    Discussion on the current channels available to practitioners to lodge an objection. To speed up the process practitioners were advised to:

    • download and complete the Objection form – for tax professionals form on their computers (the form is dynamic, changing depending on the response to each question)
    • ensure all relevant documents to substantiate the objection are attached
    • do not attach a covering letter to the objection form (the form has special coding which is picked up and allocated to a specific area - ensure that page 1 of the form is the first page of fax or letter.

    Objections should be lodged via:

    • Fax 1300 139 031, or
    • Post to:

    Australian Taxation Office
    PO Box 3524
    ALBURY NSW 2640

    Based on the interim solution proposed for the agenda item dealing with authorisations, the ATO will also explore whether objections can be received and actioned via the Business Portal. The profession will be kept informed as to the progress in this area.

    Members noted that there appears to be a backlog, leading to delays in getting a case officer allocated to their objections. However, once a case officer is allocated then the actual resolution does not seem to be taking as long. Concerns were raised by members that it can take up to six weeks before the first contact from the ATO in relation to an objection. Up until that point there is no indication whatsoever by the ATO as to whether correspondence has been received or not – this is causing frustration and concern for the profession as to whether the objection is being efficiently processed.

    The ATO acknowledged this feedback and indicated that this was not consistent with the objectives of the Fast Intensive Triage process. The ATO undertook to investigate this matter.

    As a result of the ATO investigating this matter further, the process has been changed for objections relating to the Public Groups and High Wealth Individual (PGH) market. Objections will now be acknowledged from the time they are received within RDR. The taxpayer/representative will be provided the contact details of the relevant Team Leader as a contact point until the case is allocated to a case officer. Once the objection is allocated, the relevant Case Officer will contact the taxpayer or representative to discuss their case and provide their contact details.

    Action item update

    Action item

    LPRT 1808/1

    Due date

    N/A

    Responsibility

    ATO and Round Table Members

    -

    Members to provide feedback on their interaction with the ATO to: LegalProfessionRelationships@ato.gov.au. This will be passed on to the Intermediaries Future team to follow up with practitioners directly.

     

    Action item

    LPRT 1808/2

    Due date

    Friday 29 March 2019

    Responsibility

    ATO

    -

    Work over a six month period with the legal profession to promote use of Business Portal for lodging authorisations.

      Last modified: 13 Sep 2018QC 56784