The Inspector-General of Taxation and Taxation Ombudsman (IGTO) has released its latest report in the investigation of the ATO’s administration of JobKeeper enrolment deferral decisions.
The IGTO has investigated at least 20 taxation complaints (to date). Initially (up until around April 2021), the IGTO investigations did not observe the ATO applying the ‘fair and reasonable threshold’, as set out in the Commissioner of Taxation’s own instructions to staff[2]. “This is contrary to ATO instructions which have applied since 2011 in ALL ATO deferral decisions,” said Ms Payne.
The IGTO investigation observed that the ATO:
- only granted lodgment deferral of JobKeeper enrolments where there were exceptional circumstances, which matched one of the circumstances on a list of ATO-specified circumstances;
- did not properly apply the fair and reasonable threshold, despite this threshold being set out in the Commissioner’s instructions to ATO staff (as per PS LA 2011/15);
- did not consider the particular facts and circumstances of each case to determine whether lodgement deferral was appropriate;
- disseminated guidance materials to staff, including Practice Note 2020/002 and scripting for frontline staff, which confined JobKeeper enrolment deferral approvals, to only those cases with circumstances that matched those on the ATO-specified list of circumstances;
- did not allow staff to refer requests to a more senior decision-maker unless the officer considered that the case may fall within that ATO-specified list.
The report noted that the ATO improved its decision-making post-April 2021.
Since more focused application of the ‘fair and reasonable’ test, the ATO has:
- overturned its initial decisions in a number of JobKeeper enrolment deferral requests by applying a ‘fair and reasonable’ test, in response to IGTO investigations; and
- advised the IGTO in writing and verbally that it is the ‘fair and reasonable threshold’ that should be applied and clarified that the list of ATO-specified circumstances only provide a basis for ATO officers to automatically grant JobKeeper enrolment deferrals.
[Media Release; LTN 179, 16/9/21]