Tax Ombudsman told of ATO data-matching fail | Australian Markets

An information matching train targeted on rental income on the half of the Australian Taxation Office (ATO) led to people who didn’t own rental properties receiving letters suggesting they’d didn’t declare income.

Major accounting group Chartered Accountants ANZ has told the Tax Ombudsman there’s a need for the ATO to review its processes to make sure the appropriateness of information that’s being relied upon when utilizing third get together information matching to supply a mass mailout.

CA-ANZ mentioned many of its members had complained concerning the ATO’s method primarily based on information matching.

“The most recent complaints received from members were about the ATO’s email to tax agents about their client lodgement obligations for rental property income. This was followed up by an ATO letter to the client giving them an opportunity to correct any mistakes or to request their tax agent’s help to lodge tax return amendment(s),” it mentioned.

“The ATO had used property management data to data match with taxpayers’ tax returns to see if rental income had been omitted. However, feedback from our members suggests the data on the ownership of rental property was sometimes incorrect and therefore, the ATO letters were addressed to taxpayers where there was no omission of rental income in their tax return as they did not own rental property,” the CA-ANZ mentioned.

Elsewhere in its response to the Taxation Ombudsman’s review of ATO letters and communications, CA-ANZ additionally urged that the ATO prolong the work of a communication content material working group to improve letters despatched by the tax workplace.

“Consideration should be given to refreshing the membership of this group and broadening its mandate to include a broad review of existing ATO letters – starting with PAYGI and superannuation contribution notices including those for Division 293. Consideration should also be given to require that this committee be presented with drafts of future ATO correspondence for comments before they are finalised,” it mentioned.

Such a group might be certain that the letters:

• Use day-after-day, straightforward to know language with hyperlinks to the ATO web site
• Clearly set out the taxpayer’s obligations, related timelines and every other correspondence that the taxpayer will or could obtain
• Provide all related info on the primary web page of an ATO letter.