La Law Counc uncil il of Aus ustr tralia alia Ta Taxation Committee Meeting 22 22 November 2019 2019 Ki King ng & Wood d Ma Malleso sons, , Me Melbourn rne Karen Payne Inspector-General of Taxation and Taxation Ombudsman
Ab Abou out the IGTO 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 2
22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 3
Ou Our Purpose se is s to … 1. Improve the administration of taxation laws for the benefit of the community. 2. Provide advice and assurance (to individual taxpayers, agencies or the community in general) through investigation, review and reporting that Australian taxation administration laws are operating effectively and consistent with community expectations. 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 4
In Inves estigate, e, Rep eport and Rec ecommen mmend Investigate Report Recommendations Referral •Complaints by •Privately •with Reasons •Minister or Taxpayers and (Complaints and Parliament in •Non Binding Tax Practitioners Actions) Complaint Cases raising serious •Actions •Publicly (Systems issues of conduct only) •Systems 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 5
Ou Our strategi gic priorities 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 6
Ou Our organisa sational structure 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 7
Ov Overvie view w of Taxatio ion Admin inis istratio ion System 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 8
We We want your Feedback! 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 9
Pr Prote tections for Disclosers DISCLOSURE IS MADE TAXPAYER ATO OFFICER OR TPB OFFICER TAX PRACTITIONER Voluntarily Protection from civil action only - Protection from civil action only - Protection from civil action only - Note 1 Notes 1 and 2 Notes 1 and 2 Preliminary to an Documents are inadmissible Documents are inadmissible Documents are inadmissible investigation or Review – No liability to statutory penalties No liability to statutory penalties No liability to statutory penalties Note 4 Authorised disclosure under the Authorised disclosure under the Authorised disclosure under the Privacy Act 1988 – Note 3 Privacy Act 1988 – Note 3 Privacy Act 1988 – Note 3 No loss of Legal Professional No loss of Legal Professional No loss of Legal Professional Privilege Privilege Privilege In response to a Review – Yes, if the information is lawfully Yes, if the Commissioner has Yes, if the information was Note 4 obtained – Note 5 authorised the officer to give the lawfully obtained but information - Notes 1, 2, 3 and 4 confidentiality and professional Documents are inadmissible ethical obligations may apply Documents are inadmissible No liability to statutory penalties Documents are inadmissible No liability to statutory penalties Authorised disclosure under the No liability to statutory penalties Privacy Act 1988 Authorised disclosure under the Privacy Act 1988 Authorised disclosure under the Legal Professional Privilege is Privacy Act 1988 unaffected Legal Professional Privilege is unaffected Legal Professional Privilege is unaffected Compulsorily – Note 6 Yes, if Notice is served in writing Yes, if Notice is served in writing Yes, if Notice is served in writing 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 10
No Notes t to P Protect ctions 1. Section 37 of the Ombudsman Act 1976. Protection from civil action (in respect of loss, damage or injury of any kind suffered by another person) is provided for the following acts done in good faith: a. making a complaint to the IGTO; b. making a statement or providing a document or information for the purposes of the IGT Act 2003 2. These protections do not fully override statutory, professional and ethical obligations of confidentiality & secrecy – which carry criminal and statutory penalty sanctions for breach or professional sanctions. That is, there are no personal protections from statutory or criminal penalties for voluntary disclosure. See for example, Division 355 of the Taxation Administration Act 1953 . 3. Authorised disclosure under the Privacy Act 1988 Schedule 1, Clause 2.1(g) – the use or disclosure is required or authorised by or under law. 4. The protections are not available without commencement of an investigation and only if the Commissioner has authorised the officer to provide the information (section 8(2A)(b)(iii) of the Ombudsman Act 1976 ), unless disclosure is made in response to an IGTO preliminary inquiry and in accordance with an arrangement with the Commissioner of Taxation under section 7A of the Ombudsman Act 1976 . 5. Section 8 protections include: Documents are inadmissible, No liability to statutory penalties and Legal Professional Privilege is unaffected. 6. Victimisation offences (6 months imprisonment) also apply if detriment is caused or threatened to the person who is compelled to provide information. 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 11
Inspect ctor-Gen Gener eral al of Ta Taxation Investigations 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 12
IGTO Revie IG view w In Inves estig tigatio tions ns … Must Conduct May Conduct Parliamentary Minister Own Initiated ATO TPB Committees House of Senate Joint Representatives 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 13
Comp Completed reviews 49 completed reviews to date Number Completed IGTO own initiative 41 Direction or request by the Minister 3 Request by Parliamentary Committees 2 Request by the Commissioner of Taxation 3 Total 49 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 14
Re Recent IGTO reviews 2017 - Review into the 2019 - Review into the 2018 - Review into the 2018 - Review into ATO’s employer ATO’s use of Garnishee ATO’s Fraud Control aspects of the PAYG obligations compliance Notices Management Instalments System activities Senate Standing Own Initiated Review References Committee Own Initiated Review Own Initiated Review on Economics request In response to In response to concerns In direct response to allegations made on In response to events raised by employers, insights drawn from the the ABC Four Corners relating to the AFP’s workers, IGTO’s complaints television program Operation Elbrus superannuation funds handling service aired on 9 April 2018 and tax professionals 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 15
De Death an and T Taxes An investigation into ATO systems and processes for dealing with deceased estates The investigation seeks to identify opportunities to improve the administration of deceased estate tax compliance. The IGTO will examine and consider: ‒ the experiences of the community (family and friends) in managing the tax affairs for the deceased; ‒ the ATO’s policies, processes and guidelines for receiving information from and dealing with deceased estates; ‒ the public guidance issued by the ATO to assist executors or administrators; ‒ the ATO’s systems, including the ATO Portals, for dealing with deceased estates; ‒ any legislative impediments to the efficient administration of deceased estates; and ‒ any other relevant issues to the administration of deceased estate tax obligations. ‒ All taxpayers, advisers (tax practitioners, solicitors or barristers, financial planners, trustee and estate service providers) and professional bodies are welcome to provide examples and suggestions for improving the administration of the tax laws and systems for the deceased. 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 16
De Death an and T Taxes • Some of the concerns raised (to date) include: ‒ a lack of acknowledgment from the ATO following notification of the death of a taxpayer; ‒ difficulties or delays obtaining a deceased estate tax file number; ‒ inconsistent steps for executors to provide their identity to access information, which is made more challenging in instances where the taxpayer died intestate (without a will); ‒ inconsistent advice and requirements to obtain probate or letters of administration; ‒ inability to appoint registered tax practitioners or solicitors as authorised contacts; ‒ difficulties or delays in accessing taxpayer information for the purposes of finalising taxpayer and deceased estate trust returns; and ‒ denial of access to the ATO Portals. • All taxpayers, advisers (tax practitioners, solicitors or barristers, financial planners, trustee and estate service providers) and professional bodies are welcome to provide examples and suggestions for improving the administration of the tax laws and systems for the deceased. 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 17
Un Undis isputed ed Tax Deb ebts ts An investigation and exploration into uncollected and undisputed tax debts in Australia. This investigation will essentially scope and analyse the national undisputed tax debt position and as such will reference and build upon existing reports in this area including: • Auditor General Report Number 42 – 2018 – Management of Small Business Tax Debt • Inspector General of Taxation Report – 2015 – Debt Collection 22/11/2019 Inspector-General of Taxation | Taxation Ombudsman 18
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