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  • Tax Profession Digital Implementation Group key messages 28 February 2019

    Digital substantiation co-design

    The ATO is seeking input into the use of technology to address the risks regarding the individuals not-in-business tax gap, specifically relating to the current and future client experience in record keeping and substantiating expenses.

    Findings from a random enquiry program showed that lack of substantiation is one of the main causes for adjustments, and while the individual amounts can be small, across a large population the revenue impact is significant.

    There is currently no contemporary way for the ATO to request, and for taxpayers and agents to submit, substantiation in-channel whilst completing the return. It was noted that the current processes mostly require substantiation to be provided after assessments are issued and there is no secure electronic channel to provide documentation.

    Members participated in a co-design session to give input into a digital substantiation design solution that takes into consideration the impact on tax agent clients, tax practitioners and digital service providers.

    Members were asked to consider if it would be valuable for the ATO to ask for substantiation at the time of preparing a return and how that might work in practice across the diverse practitioner population.

    The ATO will arrange further out of session discussions/workshops to further explore design opportunities, the client experience and the transition and implementation of digital substantiation.

    ATO communication preferencing

    Preferencing is the ability for a client to direct communications from the Commissioner to a specific address. It enables the client, via their agent to determine who receives the ‘push’ notification alerting them correspondence has been delivered.

    The ATO has undertaken extensive consultation with the tax and BAS agent community. At various stages this included activities such as:

    • discovery and research with agents to understand business processes
    • consultation on how correspondence types should be categorised, and
    • early prototype testing.

    A solution has been built to cater for the digital preferencing of 85% with further work progressing to bring us to 99% of all individual clients’ digitally enabled correspondence volumes.

    Testing commenced in December 2018 with a small group of agents to ensure build functionality and useability of the solution. A private beta commenced in February 2019. The ATO will continue to work with agents through the private beta to ensure a quality user experience.

    Currently if a client has a myGov account and a certain piece of digital correspondence is generated it will be sent to the myGov inbox and a notification will be sent via SMS or email to the account holder.

    The preferencing solution that the ATO is developing will allow an agent to set a preference as to who the ATO will send the digital notification to that tells the recipient that a digital piece of correspondence has been sent from the ATO.

    The end state for the ATO is to be able to apply preferencing to all types of digital correspondence. Given the large amount of work to deliver this solution, it is more than likely to take up to two years, depending on internal ATO capacity and competing technology priorities.

    Online services for agents

    Members were provided with an update on the progressive rollout of the ATO Online services for agents to tax and BAS agents.

    Between mid-January and late March 2019 the ATO will progressively make the Online services for agents available to all tax practitioners in a public beta. This rollout is designed to allow the ATO to closely monitor issues that users experience and provide support as the number of users increases.

    As at 4 February 2019, all BAS agent practices have been provided with access to the Online services for agents and invited to participate in the public beta. Email invitations to tax agent practices began issuing on 6 February 2019.

    The ATO will send an email to each practice to advise when the practice has access to the new services with instructions on what users need to do.

    Agents are encouraged to take a look, start to use the system and provide feedback by using the ‘Give us feedback’ link at the bottom of each page. While the ATO works to address common themes being received, practitioners are encouraged to continue to provide feedback about their experiences to enable the services to be refined to better meet the needs of users.

    This new service enables tax professionals to better support their clients by providing some new functionality and client information that is not currently available in the tax and BAS agent portals.

    Once all users have access to the new services, the existing tax and BAS agent portal login pages will be updated with an option to access the Online services for agents. The existing tax and BAS agent portals will remain available while agents transition to the new services.

    The ATO continues to receive positive and constructive feedback from agents who have started using the new system. Professional associations are invited to continue to provide the ATO with feedback on what is being heard in the community about the new services and work with the ATO to increase the adoption of the services.

    The ATO is undertaking regular and thorough checkpoints to monitor the system performance at key lodgment dates and as the number of users in the system increases. As Tax Time 2019 approaches, the ATO will be producing and repeating communication activities such as podcasts and recorded products.

    More information:

    Online services for agents

    Application programming interfaces

    As part of the project to improve digital services for tax practitioners, a number of Application Programming Interfaces (APIs) are progressively being released to digital service providers to enable them to incorporate functionality similar to that available in the existing Tax and BAS Agent Portals and ATO Online services for agents, into their commercial software products.

    Members were provided with a list of APIs either delivered or due to be delivered under this project. The full list of APIs, such as those that enable income tax returns to be lodged through software, are available on the SBR websiteExternal Link.

    An updated list of the APIs the ATO is working on, and intend on making available to digital service providers in the future can be accessed (by digital service providers only) at the software developers website.

    Members reiterated that many agents would like to see a list of services that are available for the digital service providers to build and put into production. This is a recurring sentiment that is expressed throughout the tax practitioner forums. Practitioners want to have influence over the priority in which services are built into practice management software.

    The ATO confirmed that delivery of the API for the client communication list (CCL) is a high priority to enable communications lists to be produced from practice management software. The ATO will not release the CCL API until it is ready, robust and provides the best experience given it will provide access to a large amount of data.

    myGov ID and Relationship Authorisation Manager

    The ATO is delivering two core components of the GovPassExternal Link program.

    The first component is the myGovID that will allow users to establish their identity once and use the myGovID credential to access government services online.

    The second component is the Relationship Authorisation Manager. This will be used initially to manage authorisations across government services for business authorisations and their staff. Tax and BAS agents will need to be authorised in Relationship Authorisation Manager to access ATO systems on behalf of a practice.

    These two components will ultimately support the transition from AUSkey, which will reach end of life in March 2020.

    All AUSkey holders who require access to the Business Portal and ATO Online services for agents will require a myGovID credential by March 2020. myGovID will not be integrated with Tax and BAS Agent Portals.

    The ATO noted the improved confidence in access security that RAM will provide in the future which current ‘one AUSkey linked to one ABN’ does not currently provide. RAM will prevent the misuse and work arounds that some practitioners currently use when using AUSkeys within their practices.

    Members discussed the timeline for change and digital service providers expressed concerns in relation to the time available to progress to this new credential for identity and authorisation.

    Members acknowledged that the scope of this program goes a long way beyond access to ATO services and that the identity framework supports proper and secure access in the future to all government and non-government services.

    The ATO will establish a working group with tax practitioners, professional association representatives and digital service providers to seek input on the AUSkey transition plan and change management approach.

    Granular data and real time analytics

    Real time analytics

    Real-time analytics is a tailored, pre-lodgment messaging service currently operating in myTax, and is now available for digital service providers to include in their individual income tax return software.

    It provides agents with real-time messages about income and deductions that might be incorrect, to assist them to better understand the risk profile of the individual income tax return they are preparing. Where applicable, messages prompt agents to check label values before lodging.

    This service has been requested by tax agents to ensure consistency with myTax. The availability of this feature through practice management software is at the discretion of the digital service provider.

    Granular data

    As part of the work to address the individuals not-in-business tax gap, the amount of information lodged by tax agents for individual income tax returns will increase. A number of schedules will be created or updated for SBR/PLS to collect this information.

    This is a mandatory change from 1 July 2019 commencing with the Deduction details schedule and further mandatory schedules commencing 1 July 2020. The schedules will form part of the approved individual income tax return form.

    Line item data will be required for most income and deduction labels on the individual tax return, rather than just the rolled up totals that are currently provided on tax agent lodged returns. Additional repeating rows will be created in tax agent software to record the individual descriptions and amounts.

    This will align the information received from agent lodged returns, with that currently received from self-preparer returns lodged through myTax.

    Depending on digital service provider implementation, there should be minimal (if any) noticeable change for tax agents in terms of providing the data.

    Benefits include:

    • Greater transparency of information in seeing the details of claims in past returns.
    • Reduction in unnecessary ATO contact due to more detailed information being provided at lodgment.
    • More level playing field where better data will assist the ATO in identifying those doing the wrong thing.
    • Better help and guidance from the ATO in developing more tailored advisory products for agents.
    • The improved functionality will enable better cross-form and up-front validations.

    It was noted that some practitioners may need to alter their return preparation processes to be able to complete the additional label information that will be required in Tax Time 2019. Immediate and wide communication from the ATO is critical to prepare tax agents for this requirement. Supplementary communication from the digital service providers will further support agents leading up to Tax Time 2019.

    Members highlighted that consideration should also be given to ATO compliance readiness, including how compliance officers interpret and use the additional data so as to not create an unintended reverse workflow.

    Tax time 2019

    Members discussed their views on the priority issues for tax practitioners leading into Tax Time 2019 focusing on two main questions:

    • What does the current and future environment mean for Tax Time 2019?
    • What are the risks and opportunities?

    Member recommendations were noted and will be taken into consideration in the planning for tax time.

    Attendees

    Organisation and name of attendees

    Organisation

    Members

    H&R Block

    Joe Abouzaid

    Anderson Tax & Consulting

    Debra Anderson

    MYOB / ABSIA

    Mike Behling

    ATO

    Grant Brodie

    Metropolitan Taxation Services

    Keith Clissold

    ATO

    Sonia Corsini

    Chartered Accountants Australia and New Zealand

    Michael Croker

    Institute of Public Accountants

    Tony Greco

    Griffin Group Accountants, Etax Accountants

    Don Griffin

    PricewaterhouseCoopers

    Tully Holleley

    Reckon

    Kevin Johnson

    Wolters Kluwer, CCH

    Tony Katsigarakis

    Pitcher Partners

    Scott Laing

    ATO

    Martin Mane

    McCann Financial Group Services

    Phil McCann

    KPMG

    Dale McKay

    Xero

    Anthony Migliardi

    Morris and Associates

    Mark Morris

    CPA Australia

    Gavan Ord

    KPMG

    Anne Pengilly

    Deloitte

    Tracey Rens

    ATO

    Michael Rowell

    Clarity Professional Group

    Warren Seeto

    ATO

    Colin Walker

    ATO

    Andrew Watson

    Catsoft

    Jack Wee

    National Tax and Accountants Association

    Rodney Wilson

    The Tax Institute

    Elizabeth Wong

    HandiSoft, Sage Software Australia

    Michael Wright

    ATO (secretariat)

    Renee Bruce

    ATO (secretariat)

    Audra Paskevicius

    Apologies

    Organisation

    Members

    Institute of Certified Bookkeepers

    Matthew Addison

    Sybiz

    Grant Argy

    Wolters Kluwer, CCH

    Briony Campbell

    ATO

    John Dardo

    ATO

    Damien Hobbin

    Tax and Super Australia

    Michael McCarthy

    Guests and presenters

    Organisation

    Attendee

    ATO

    Kath Anderson

    ATO

    Ross Barns

    ATO

    Karen Foat

    ATO

    Allan Gaskill

    ATO

    Felix Manero

    ATO

    Claire Miller

    ATO

    Claire O’Neill

    ATO

    Beth Strods

    ATO

    Jimmy Tzimopoulos

      Last modified: 23 May 2019QC 59041