Should The ATO Be Given More Funding For Heavy Handed Collectors? Trusted WIthout Additional Oversight? Focussing Time and Resources On PAYE Taxpayers Instead of Large Corporations?

The Annual Budget See-Saw

Australian Tax Office will receive a $260 million funding boost to pursue taxpayers who over-claim on cars, uniforms, internet and other work-related expenses as part of a double-hit that will also see it empowered to reclaim unpaid tax debts. (SMH May 9th, 2018)

In handing down the 2018 Federal Budget, the Treasurer balanced tax cuts against additional collections from PAYG taxpayers returns, both past and future.

It is business as usual at the ATO. More funds, more dollars for technology, staff and other resources from the annual budget. This year it is particularly painful, coming on the back of whistleblower accusations of heavy handed collectors being required to meet “collections targets”. With small business outrage over forced closures and the impact on  business owners health and mental wellbeing due to threats and letters of demand driven by ATO staff collection targets rather than thorough investigation of individual circumstances.

As calls for greater accountability at the ATO have fallen on deaf ears, are we now headed for a PAYE attack under similar circumstances to that which has been waged on small business?

Annual Funding Increase To Collect More Tax

According to Budget Papers, some $130 million will go towards speeding up the work of the ATO’s debt-collectors.  This will allow them to fund more prosecutions of “those taxpayers gaining an unfair financial advantage over those who pay their fair share”, according to Treasurer Morrison.

Financial Services and Revenue Minister Kelly O’Dwyer, issued a warning to tax agents of unscrupulous taxpayers, who will be targeted under the new ATO measures. Employing the power of Big Data and the IoT, the ATO will issue Real Time warnings to taxpayers making claims.

Not neglecting those earning foreign income, additional funding for four income-matching programs will allow the ATO to detect foreign payment sources.

If forward estimates are accurate, the ATO expects to claw back $1.2 billion through these measures, with a further $700,000,000 from tightening allowable claims for businesses.

Budget 2018: What Is Different in an Election Year?

Cynics point to the coverage given to tax cuts for “ordinary Australians” when comapred to the bigger teeth the government has given an ATO. Given that the ATO has come under fire by small business owners for heavy handed tactics when demanding payment of presumed outstanding taxation. Allegations of collection targets, garnishee noices, forcing the closure of business and even property sales; will these tactics now be applied to PAYG taxpayers?

No additonal oversight or inquiry has been launched by a government that seems intent on revenue raising over social policy. Our firm meets clients after the ATO has threatened their livelihood. They are under enormous financial, physical, emotional and mental stress. It is only our extensive knowledge of taxation law, keeping up with ever-changing rules that allows us to apply reality; in many cases preventing the closure of businesses or negotiating payment plans or settlements that saves their businesses, relationship and financial status.

Is this the time to give the ATO more power, money and power without additonal oversight?

History Repeating Itself in the 2018 Budget

Be assured that PAYG taxpayers, coming under intense scrutiny of past and future returns are about to feel the pain which small business owners who have been issued with automated payment requests, often without explaination. Owners suffering severe stress have sought medical assistance, and in the extreme resorted to suicide.

This is not evasion or not paying tax at any level. It is a communication / human issue. The ATO juggernaught with its highly sophisticated level of automation overlooks the human-factor in its collection system. Let’s face it, no one likes to be speaking to people all day, every day, about outstanding debts. It is far easier to hide behind an automated letter or email; knowing that the recipient’s emotions will dissipate prior to them speaking to anyone in the ATO.

Diffusing anger and frustration allows the ATO to focus on the ‘facts’ as they perceive them. It doesn’t help answer questions by taxpayers, or provide understanding about intricacies of taxation law which a majority of the population simply don’t understand. Given that we are a multicultural society which relies on immigration for population growth, it is not surprising that rudimentary English language skills turn up the heat in conversations with the ATO. Educated immigrants face the battle of growing up under one set of tax rules and living under another.

Our office will see an increased number of ATO errors causing immense stress to individuals. We can see the pattern that began with businesses and is now reaching down the taxpayer food chain. Lower income earners simply don’t have the resources to pay for top quality advice resulting in them

  • Falling foul of the law through poor advice or lack of knowledge
  • Responding in panic to ATO demands without questioning allegations
  • Paying taxation they don’t owe, or paying exhorbitant penalties for minor misdemeanours

We are here to help, and encourage early intervention. The prevention of a Penalty Notice or corrections to returns make such a significant difference to your financial, physical, mental and emotional wellbeing.