AFR - ATO agrees to improve help for accounting professionals { See full Text at the end of the blog entry}
1. Australia’s taxation and superannuation systems are based on taxpayers self-assessing their obligations and reporting to the Australian Taxation Office (ATO). The ATO reported that tax agents lodged 70 per cent of tax returns, and tax and business activity statement (BAS) agents lodged 57 per cent of BAS, in 2019–20.
2. There are a range of professionals that provide intermediary services within the taxation and superannuation systems. The ATO has stated that it regards its relationships with tax and BAS agents as perhaps its most significant intermediary relationship in the tax system. The ATO engages with tax practitioners through consultation activities and groups; by providing services and support; and through individual interactions relating to specific client or practitioner matters.
Rationale for undertaking the audit
3. Tax practitioners play an important role in Australia’s taxation and superannuation systems by supporting taxpayers to meet their taxation and superannuation related obligations. Effective engagement between the ATO and tax practitioners potentially supports more efficient and effective taxation and superannuation systems.
4. Reviews in 2015 and 2018 of the ATO’s engagement with and support for tax practitioners identified concerns with the ATO’s transparency, communication and level of service. The ATO’s engagement with tax practitioners was identified by the Joint Committee of Public Accounts and Audit as an audit priority of the Parliament.
Audit objective and criteria
5. The objective of the audit was to assess the effectiveness of the ATO’s engagement with tax practitioners in achieving efficient and effective taxation and superannuation systems.
6. To form a conclusion against the objective, the following criteria were adopted.
- Does the ATO have an effective strategic framework for engaging with tax practitioners?
- Does the ATO effectively engage and consult with tax practitioners in developing its strategy, services and support?
- Does the ATO provide effective services and support for tax practitioners?
Conclusion
7. The ATO is largely effective in implementing its tax practitioner engagement activities. The development of a strategic and performance framework for tax practitioner engagement would allow the impact on the efficiency and effectiveness of the taxation and superannuation systems from the ATO’s engagement activities to be assessed.
8. The ATO has a partly effective strategic framework for engaging with tax practitioners. While there have been various engagement objectives and documented strategies over time, these are not always clearly aligned to demonstrate how the strategies contribute to achieving the engagement objectives. Coordinated strategic planning is developing. The implementation of tax practitioner targeted strategies has not always been supported by documented implementation planning. External performance reporting on tax practitioner engagement is limited in scope. The ATO does not have a fully formed performance framework to assess the effectiveness of its strategic approach to engaging with tax practitioners.
9. The ATO has a largely effective approach to consulting tax practitioners to inform the development of its strategy, services and support. There is an entity-level consultation framework and there are tax practitioner consultation channels, including standing and special purpose consultation groups. Tax practitioner consultations reviewed by the ANAO are broadly consistent with Australian Public Service standards for engagement. The ATO has an established process for identifying consultation participants, although criteria supporting the selection of consultation group members are not defined. The ATO publicly reports key messages from its consultation group meetings and provides some public information about the outcomes of its consultation activities. The ATO has not comprehensively reviewed the effectiveness of its tax practitioner consultation practices.
10. The ATO provides largely effective services and support for tax practitioners. The ATO plans, although it does not always review the effectiveness of, its communications to tax practitioners. Two key tax practitioner programs reviewed as part of the audit are supported through largely effective communications. The ATO monitors the performance of its tax practitioner enquiry channels in terms of timeliness of response. Monitoring of service quality through the channels, including whether enquiries were satisfactorily resolved by skilled staff, is less evident. Digital services for tax practitioners are largely fit for purpose.
Australian Taxation Office’s Engagement with Tax Practitioners
ATO agrees to improve help for accounting professionals
The Tax Office has agreed to consult accountants and business activity statement agents on how to improve an industry help line, after an Auditor-General’s report found room for better assistance to the industry.
The review found the ATO provides largely effective services and support for tax practitioners around Australia. However, less evident to auditors was how it monitored the effectiveness of answers to requests for help, including whether enquiries were satisfactorily resolved.
Mark Molesworth, tax partner at BDO, has welcomed steps to boost performance.
The report said the ATO was largely effective in implementing its tax practitioner engagement activities, while a strategic plan was partly effective. Improvements to the tax agent phone line were recommended, including consultation with tax agents to guide its future development.
About 64,000 tax and business activity statement agents registered with the Tax Practitioners Board are covered by the report. The group has oversight of 70 per cent of tax returns and 57 per cent of business activity statements.
As a group, they made 1.5 million phone calls to the ATO in 2020-21.
BDO tax partner Mark Molesworth welcomed plans to improve the knowledge of staff manning the tax agents phone line.
“This is a common refrain among practitioners – the person on the phone from the ATO often can’t help and must ‘escalate’ the enquiry – leading to wasted time and double handling,” he said.
“We suspect that many practitioners will still be concerned about the one-to-one interactions that they have with the ATO other than over the phone line.
“Commonly we hear of information being provided to the ATO appearing to drop into a black hole of ‘escalation’ and ‘referral to experts’ for six months or more, and then practitioners being pressured to answer queries in two- or four-week time frames.
“This is likely symptomatic of the same concerns associated with the phone line – insufficiently experienced frontline staff and insufficient capacity in the high-expertise areas at the ATO.”
Mr Molesworth said it was concerning that less than half of participants in ATO consultations were somewhat or very confident in the approach of the ATO.
The report recommended better communication to tax professionals and a new measurement of the effectiveness of outreach by the ATO. It also said moves to measure transparency, consistency and diversity in consultation was needed.
Second Commissioner of Taxation Jeremy Hirschhorn said the ATO agreed with the report’s recommendations and would “continue to refine and improve” the ways the organisation engaged with tax agents.
