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  • Consultation paper – National Tax Clinic open competitive grant program

    Your feedback

    This paper invites your feedback on the National Tax Clinic open competitive grant program consultation paper.

    Closing date for comment: 8 January 2021

    Provide feedback by email to: NationalTaxClinics@ato.gov.au

    Contact officer: Narrelle Kelly, phone (02) 6216 6518

    We encourage you to raise any other relevant issues or specific concerns about matters discussed in this paper. Your responses may be made available to the public on the ATO website unless you indicate that you would like all or part of your response to remain in confidence. Automatically generated confidentiality statements in emails do not suffice for this purpose. Confidential elements should be marked or provided in a separate document.

    Purpose of paper

    The ATO is seeking feedback into the development of the National Tax Clinic grant open competitive grant guidelines in line with better practice according to the Commonwealth Grants Rules and GuidelinesExternal Link.

    The National Tax Clinic program trial operated under the ATO’s Sponsorship grant program, a closed non-competitive one off or ad-hoc grant program. The program continues to operate under this framework. However, in line with the Australian Government’s intention for the program, the ATO is transitioning the program to an open competitive grant program.

    We are seeking your input into the development of the grant opportunity guidelines that will underpin the ongoing operation of the program to ensure the National Tax Clinic program continues to meet the needs and expectations of the broader community.

    We are specifically focusing on receiving feedback on the assessment criteria used to assess applications under a competitive grant program.

    This paper is targeted at all categories of stakeholders who are impacted by the National Tax Clinic program and seeks to gain their insights on how an ongoing program could be most beneficial and impactful.

    Background

    The National Tax Clinic program was announced by the Australian Government in the 2019-20 Mid-Year Economic and Fiscal Outlook after the success of the National Tax Clinic program trial undertaken throughout 2019.

    The National Tax Clinic program trial was established following the successful pilot of Australia’s first tax clinic at Curtin University and a review of the established United States' Low Income Taxpayer ClinicsExternal Link. The National Tax Clinic program trial was designed to provide pro bono support and assistance to unrepresented individuals and small businesses with their tax affairs while simultaneously providing practical experience to students undertaking relevant studies.

    The initiative sought to provide services to people who may not be able to use the services of tax practitioners due to economic, social, or personal factors, to navigate the often-daunting tax system on a pro bono basis. The trial aimed to provide clients with an independent service to seek free tax advice and assistance from students under the supervision of qualified tax professionals.

    The trial sought to provide a unique service distinct from other free services already available to assist taxpayers meeting their tax obligations. Existing services included ATO services such as Tax Help, Pop Ups, Dispute Assist, and in-house facilitation. The trial aimed to fill a gap in the market for providing pro bono tax advice, as there were no Community Legal Centres in Australia specialising in tax matters.

    For the National Tax Clinic program trial, the Australian Government selected ten universities around Australia to receive up to $100,000 in grant funds to establish and operate tax clinics for 12 months by undertaking four key activities – advice, representation, education, and advocacy.

    In December 2019, the Government extended the National Tax Clinic program for an additional four years and tasked the ATO with transitioning the program from the current closed non-competitive grant program to an open competitive grant program, increasing the available grant funds in later years to accommodate the expected increase in potential grantees wishing to participate in the program.

    The ATO will remain the grant administrator of the National Tax Clinic program, which entails being responsible for the development and implementation of the new grant program as well as ensuring the current closed grant program achieves value with relevant money. The ATO is not involved in the day-to-day operation of the tax clinics nor does it influence the clients or service they provide.

    We are seeking to consult with the various stakeholder groups who could be impacted by the National Tax Clinic program; either directly as a potential grantee or as a potential client of a tax clinic, or indirectly as a member of the tax profession. This consultation is to identify the assessment criteria to ensure the National Tax Clinics continues to achieve the government's objectives of the program.

    Stakeholder Groups

    The key stakeholder groups that have been identified and we would like to receive feedback from are:

    • clients – people who use the services of the National Tax Clinic program and organisations that provide other support to those people
    • students – people who are undertaking relevant studies and could undertake practical training in a Tax Clinic
    • academia – includes current and potential tax clinic operators and organisations that deliver training and education to students on matters including; business, accounting, economics, tax, and law
    • the tax profession; individuals, firms, and professional bodies who provide tax advice and assistance to fee paying clients.

    The Australian Government and the ATO are other stakeholders who we will be engaging with through other means in seeking feedback on the consultation questions below.

    Consultation questions

    The ATO invites interested parties to lodge written submissions on the following questions. Other ideas, comments and suggestions in relation to additional aspects of the grant opportunity guidelines are also welcome.

    When you respond to the below questions, please include which stakeholder group you relate to.

    The questions align to the Commonwealth Grants Rules and GuidelinesExternal Link and relate directly to the Department of Finance’s Commonwealth Grants Policy FrameworkExternal Link. If you would like more information on the question you are responding to, more information can be found at finance.gov.auExternal Link

    1 Focus of National Tax Clinic program

    The Australian Government stated the intent for the National Tax Clinic program trial as being twofold:

    • To resolve issues, provide advice and education services as well as represent and advocate for taxpayers. It is about helping people who may otherwise fall through the cracks.
    • To build practical experience for students who are the future of the tax profession. The program will offer student volunteers the opportunity to work with unrepresented taxpayers under the direct supervision of qualified tax professionals.

    1.1 Question

    In an open competitive process, should weighting be given to these two attributes in regard to their importance in administering a Tax Clinic? If so, what weighting should be given to each intent, for example 50% to support taxpayers and 50% for students?

    2 Eligible National Tax Clinic clients

    The Australian Government did not set criteria for the clientele to be assisted by Tax Clinic participants, but instead provided general guidance that the participants should focus on 'helping people who may otherwise fall through the cracks'.

    2.1 Question

    What is your understanding of the type of taxpayers who may 'otherwise fall through the cracks'? Please provide as much detail as possible when responding.

    2.2 Question

    In an open competitive grant process, should more weighting be given to the types of clients a tax clinic could serve? Explain why or why not.

    2.3 Question

    If the National Tax Clinic program was to be made available only to certain vulnerable groups, what should be the key criteria for eligibility and how best could tax clinics engage with these groups?

    3 Key activities of the National Tax Clinic program

    The Government set out four broad activities that participants in the National Tax Clinic program trial would undertake, with these broad activities each encompassing a number of services. The broad key activities were:

    • Advice
    • Representation
    • Education
    • Advocacy.

    3.1 Question

    When assessing grant applications, what percentage weighting should be given to the following activities? Provide an explanation for your weighting. Responses should add up to 100%.

    1. Providing advice to clients to better understand the tax system
    2. Representing taxpayers and small businesses when they need to interact with the ATO
    3. Undertaking educational activities to better inform students, taxpayers and the broader community on matters of interest and concern
    4. Advocating on behalf of clients when systemic issues are identified in their dealings with regulatory or government agencies.

    4 Type of selection process

    4.1 Question

    In regard to awarding grant funds in the upcoming round of National Tax Clinic program funding, which one of the following selection processes should be used and why?

    • Demand-driven selection – funding is based on eligibility only and awarded as applications are received until the total funding is exhausted
    • A proportionate selection – total funding is divided by total demand and grant funds are paid proportional to the requested amount
    • A merit-based process – funding is awarded based on a competitive assessment of selection criteria responses.

    4.2 Question

    Are there any other issues in regard to the type of selection process that should be considered? Provide as much detail as possible.

    5 Location of tax clinics

    The National Tax Clinic program trial was limited to ten universities with the expectation that there would be at least one tax clinic located in every State and Territory. Currently there are ten universities operating Tax Clinics across Australia, with nine universities located in Capital cities and one in a regional area. A number of these universities have also established secondary tax clinics or have undertaken outreach in regional locations.

    5.1 Question

    What factors should be taken into account when deciding the geographical spread of tax clinics? Provide as much detail as possible.

    6 Relevant study areas

    As stated in Focus of National Tax Clinic program, the National Tax Clinic program trial had a dual intent, with one being to provide practical experience for those who are the future of the tax profession. As such, the National Tax Clinic program trial selected institutions that had relevant courses of study and students.

    6.1 Question

    Should the program be limited to institutions offering relevant studies? If so, what studies do you consider relevant?

    6.2 Question

    Should the ongoing program be limited to universities who offer relevant studies, or should the program be extended to other tertiary education providers? If so, which other tertiary education providers should be considered, for example TAFEs, independent private institutions?

    6.3 Question

    In an open competitive process, what weighting should be given to the issue of relevant study areas to the ongoing program? Why?

    7 Tax Clinic model

    During the National Tax Clinic program trial, the Government encouraged participants to develop Tax Clinic models that best suited their institution and intended clients. This has resulted in significantly varied Tax Clinic models. The current tax clinics operate within three broad categories of tax clinic:

    • Tax Agent model – utilising a registered tax agent as the tax clinic supervisor and offering services similar to a tax agent firm
    • Community Legal Service – supervised by a legal professional and providing both tax and legal services
    • Pro bono tax service provider – uses a variety of tax professional supervisors and provides a range of tax agent services.

    Within these three broad categories there are a number of other factors that result in operational differences within the tax clinics.

    7.1 Question

    As the National Tax Clinic program continues, do you think program participants should be able to develop different operating models, or should there be a standard Tax Clinic model that all participants must follow? Provide as much detail as possible.

    8 Factors to be considered when assessing applications

    8.1 Question

    On a scale of 1–5, with 1 being not at all important to 5 being extremely important, how would you rate the following factors regarding their importance in selecting a successful tax clinic provider?

    1. Presence of multiple Tax Clinics in the same geographical area
    2. Geographical coverage of Tax Clinics around Australia
    3. Amount of time a proposed Tax Clinic will be operational and available to clients
    4. Number of students who will gain experience working in a Tax Clinic
    5. Number of student hours a proposed Tax Clinic will fulfil
    6. Studies or courses that students who will work in a tax clinic are undertaking
    7. Type of activities a proposed Tax Clinic will undertake
    8. Volume of activities forecasted that a Tax Clinic will undertake
    9. Type of professional supervision for the proposed Tax Clinic
    10. Ability to provide outreach services
    11. Extent of outreach services
    12. Accessibility to vulnerable clients
    13. QS World University Ranking
    14. The requested grant funds to operate a tax clinic
    15. Joint applications across various academic institutions
    16. Presence of an existing Tax Clinic, including past output.

    8.1 Question

    In addition to the factors listed above, in Question 8.1, are there any other factors that are not listed that should be considered when selecting applicants for the tax clinic program? Why?

    9 Fixed or variable funding models

    Currently the National Tax Clinic program is funded as a fixed amount per year with each institution able to receive the same amount of funds. Similarly, the United States' Low Income Taxpayer ClinicsExternal Link (LITC) model provides a maximum funding amount a tax clinic could receive, but varies grant funding based upon a variety of factors. For further details on the factors the LITC model takes into account when assessing grant application, see section V of the Low Income Taxpayer Clinics 2021 Grant Application Package and Guidelines (PDF, 14MB)This link will download a file.

    9.1 Question

    Should grant funding continue on a fixed funding model, or should institutions be able to tailor their funding requests to the services and output they wish to provide? Provide as much detail as possible.

    9.2 Question

    If funding was offered as a variable amount, what factors should be taken into account and how would you weight those factors?

    10 General comments

    10.1 Question

    Is there anything you would like to bring to our attention regarding the development of the National Tax Clinic program grant opportunity guidelines?

      Last modified: 13 Nov 2020QC 64179