Accountant urges ATO to bring back some ‘humanity’

When asked how the ATO should treat individual and small business taxpayers as well as accountants, Freeman said she would like to see “humanity”.

“Accountants are well-positioned to help their clients, but if we keep getting excess legislation, and more penalties that aren’t remitted, that could push a taxpayer or business under,” she said.

“Worse still, the owners of a good business might decide that they’ve had enough and decide to close their doors or sell their business. You don’t want a good business to close their doors. We could end up losing good businesses because of the prevailing climate, and that’s even worse in my view.”

Freeman provided the example of her client who suffered from Alzheimer’s and had not lodged returns for a few years. Freeman lodged six returns and applied for a penalty remission, which she said was granted. However, she explained that the ATO did not grant remissions for the next batch of returns that Freeman lodged.

“We had to go to complaints and argue and argue,” Freeman said.

“When someone has no capacity, how can you assume that they can act in a rational manner? That’s just basic psychology.”

Freeman detailed another example of requesting the ATO if she could apply for a deferral on a tax obligation because the taxpayer was deceased, but she was told to fill an online form.

“We wrote in and asked for a deferral, but it takes longer for them to process the computerised form that you have to fill in. We received another notice recently, which is just ridiculous. There’s no proper process, and it’s just resulting in unnecessary and extra work,” Freeman said.

“We receive rejection letters no matter what we ask. We end up lodging a complaint so many times, which we shouldn’t have to because there should be a robust process. And then we get a different outcome. I feel for the individuals who are being disadvantaged.”

Freeman also said she is serviced by a different person at the ATO every time she contacts them.

“You never deal with the same person twice. If I think back to 30 years ago, we dealt with one specific person all the time. We’d always ring that person if we had any issues. They’d look at it objectively and deal with it,” she said.

“But now, you’ve got technology like AI, which is fantastic for saving time on certain tasks. But AI can’t interpret the data. We need the human element. I think everyone is relying so much on computerising everything at the ATO that they’ve forgotten that we also need the human element.

“They might receive their wages, but the small business taxpayers they’re dealing with might not get paid because there is no cash flow. It’s just a very difficult situation all around.”

Alongside issues with the ATO, Freeman pointed out that accountants and their clients are contending with Payday super, red tape, and new anti-money laundering laws.

“In the 40 years I've been in practice, I have maybe seen two instances of where people were potentially money laundering and trying to cheat the system. For that small percentage, we've now got to do twice as much administration,” she said.

On top of this, the ATO’s announcement that it will not allow taxpayers to use credit cards to fulfil their tax obligations from July 2027 would exacerbate cash flow crunches for a small business, Freeman warned.

“Cash flow may not come in today for small businesses, and you've got a tax bill or a payday super,” she said.

“It's convenient to use a card because the money may come in a bit later and you can pay back the card. You can't always control the way people pay you. Some industries can, but a whole lot can't.”

The inaugural ATO Sentiment Report by Accountants Daily has revealed that almost nine in 10 accountants think the ATO has become somewhat or significantly more aggressive in its enforcement and compliance approach.  

One practitioner commented that “it seems that tax agents have progressed from being a partner to both the ATO and the client, to being viewed by the ATO as another adversary. We often see ourselves bypassed, so that our clients are contacted directly by the ATO, instead of us”.