The Inspector-General of Taxation released its 2017-18 Annual Report on 18 October 2018.

The Inspector-General, Ali Noroozi, confirmed that this would be his last Annual Report, following his decision not to seek another term.

The themes in the Annual Report included the following.

  • The creation of the IGT in 2003 to investigate systemic problems in the ATO – albeit with trepidation as the smallest agency supposedly keeping one of the biggest agencies in check.
  • Ali Noroozi becoming the 2nd Inspector General, in 2008 after the formative work of David Vos, in establishing the IGT (despite the ‘David and Goliath’ task).
  • Mr Noroozi went through a number of the seminal ‘systemic’ inquiries and reports, which he said had made a significant difference to the standards in the ATO.
  • The early efforts of the Abbot Government to ‘streamline’ the IGT into the Federal Ombudsman, which would have destroyed the tax culture built up in the IGT’s office and the victory it represented (for the IGT and the tax profession), in 2015,  when the Ombudsman’s ‘complaints’ function was folded into the IGT’s office (instead of vice-versa) – ushering in an era when individual complaints could inform it’s systemic role and vice-versa.
  • He also said their handling of the complaints function had been very successful, handling over 7,000 complaints, to date, finalising a very high proportion of them in 15 days, with ‘overwhelmingly positive feedback’ (a 80% satisfaction rating).

Recently completed reviews included the following.

  1. Review into Aspects of the Pay As You Go Instalments System;
  2. Review into GST Refunds
  3. Review into the ATO’s fraud control management.

Reviews in progress, reported on, were the following (in greater detail).

  • Review into the Australian Taxation Office’s use of Garnishee Notices

As mentioned earlier, the Garnishee review was commenced on 16 May 2018, following a joint Fairfax-ABC Four Corners investigation which brought into question the ATO’s debt collection practices. This investigation included allegations by current and former ATO staff about inappropriate use of ATO powers to issue garnishee notices and extracting payment particularly from small business taxpayers. [Amongst the allegations was that the ATO was inappropriately driven to achieve projections the ATO gave Government for its budget purposes, including, and in particular, issuing ‘garnishee notices’ to every taxpayer with outstanding debts, regardless of how appropriate it was – which included the famous ‘hour of power’ email, to ATO staff, advising them that they had 1 remaining hour, in the day, in which they could get out a certain number of garnishee notices.]

This review will examine the above allegations and explore the themes arising from related complaints made to the IGT in recent years. Furthermore, it will consider the ATO’s implementation of specific recommendations made in the 2015 IGT Debt Collection review.

  • Review into the Future of the Tax Profession

The Future of the tax profession review was undertaken in response to a request from the Commissioner as well as concerns raised by stakeholders within the tax profession, particularly tax practitioners, through our complaints handling service and in our other engagements with the tax profession.

In 2014, the IGT undertook a review into the ATO’s services and support for tax practitioners. That review largely examined the ATO’s relationship with, and services provided to, tax practitioners. This review is not intended to be a follow up to the 2014 review but, rather, it is forward looking and examines the impending technological, social, policy and regulatory changes which will have a lasting impact on the tax profession. It will seek to address the challenges ahead and realise potential benefits for tax practitioners, the ATO and the TPB as well as the broader community.

FJM 6.11.18

[IGT website: 2017/18 Annual Report; LTN 202, 19/10/18; Tax Month – October 2018]

 

CPD questions (answers available)

  1. Who is the outgoing Inspector General?
  2. When was the IGT formed?
  3. Who was the first Inspector General?
  4. What was it’s original role?
  5. Which of the ‘completed reviews’ mentioned is most relevant to the resignation, of a high ranking ATO official for misuse of his position to assist his son, who was being investigated for what turned out to be a huge ‘phoenixing’ fraud?
  6. Which of the Reviews in Progress involved the ‘hour of power’ allegation?
  7. Which of these reviews was requested by the Commissioner (in a reversal of usual form)?

[Answers:1.AliNoroozi;2.2003;3.DavidVos;4.investigatingAndReportingOnSystemicIssuesInTheATO;

5.ReviewIntoTheATO’sFraudControlManagement;6.ATOsUseOfGarnisheeNotices;7.ReviewIntoTheFutureOfTheTaxProfession]

 

 

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