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The Inspector-General of Taxation has been urged to look into how the ATO resolves legal and administrative issues in the wake of the drawn-out deceased estates dilemma.
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CA ANZ, CPA push for review into ATO’s deceased estate bungle
17 December 2019
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9 minute read
In a joint submission to the Inspector-General of Taxation, Chartered Accountants Australia and New Zealand (CA ANZ) and CPA Australia have called for a review into the lengthy process taken to resolve the denial of access to deceased taxpayers records on Online Services for Agents.
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Tax agents no longer have access to deceased taxpayers’ information since the old tax and BAS agent portals closed last month.
The submission notes that the issue was first identified in February 2018 during the beta testing of Online Services for Agents, but it took nearly two years before the ATO finally announced it would be seeking to use the Commissioner’s Remedial Power (CRP) to modify the law.
Given that the CRP is a legislative instrument that will need to be tabled in Parliament for consideration, the earliest it can take effect will be 13 May 2020, 27 months after the issue was first highlighted.
“We note the length of time it has taken the ATO to design a response to the legal issues identified during beta testing in February 2018,” said CA ANZ and CPA Australia.
“We suggest that the Inspector-General of Taxation consider a future review into the ATO’s beta testing processes, including investigating options to improve how it resolves legal and administrative issues identified during testing of new systems.”
In the interim before the CRP process is successful, the ATO will only provide access to a deceased client’s information where the agent is the legal personal representative (LPR).
LPRs can also request for a deceased estate data package and can then pass on the information to a registered agent.
Both major accounting bodies have highlighted the risk and delays in such a process.
“With the denial of access through [Online Services for Agents], the ATO process becomes manual and paper-based. The LPR must act as an intermediary on tax matters between the tax professional and the ATO,” said the joint submission.
“It is likely that protracted discussions between tax professionals and an LPR will occur, leading to incorrect requests, misunderstandings and errors, increased costs and, in some instances, personal distress. It can also result in significant reverse workflow for the ATO.
“The increased risks resulting from this manual process are borne by the LPR who is liable to pay any outstanding tax-related liabilities of a deceased person, including meeting them personally if estate assets are distributed with a notice of a claim by the ATO.”
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