IPA welcomes Tax Ombudsman's review into GIC

One of the main concerns raised in the review was the inconsistency of the ATO's remission decisions.

IPA senior tax advisor Tony Greco said this was also reflected in the feedback received from IPA members.

"The ATO's own review from 2024 showed that 77 per cent of remission decisions were not compliant with its internal guidelines and procedures — and 42 per cent did not even consider the cause of the delay in payment," said Greco.

"These outcomes are not acceptable, and they give practitioners little confidence in the fairness of the system. The failure to consider personal circumstances or the cause of delay in particular disproportionately affects small businesses, many of which are owner-operated and do not have abundant resources to take care of their tax affairs."

Greco said the ATO must make it a priority to remediate this situation and ensure that the guidelines on GIC remission are well understood and applied consistently to all decisions.

The professional body said it was pleased that the ATO has already agreed to all of the Tax Ombudsman's recommendations.

"It's also encouraging to see that the ATO has already taken some initiatives to improve its policies and processes ahead of the release of the Ombudsman’s report," said Greco.

"However, these are just first steps and the ATO must continuously fine-tune them on an ongoing basis to ensure that decision-makers adhere to established guidelines all of the time and are making consistent decisions across taxpayers in comparable circumstances."

Greco said it was particularly concerning that the review found 92 per cent of phone requests were approved, compared to 76 per cent of written requests, and that phone staff generally did not follow internal guidelines.

"Taxpayers and their agents are entitled to expect that they will be treated the same regardless of how the request is lodged," he said.

The IPA said that while it welcomes the ATO’s proactivity in implementing interim changes to the remission process and the contemporaneous work that it is doing to update its concessions principles framework and vulnerability framework, further changes with different starting points need to be harmonised.

The ATO must also ensure these changes are "comprehensively communicated to practitioners to avoid confusion and unintended errors", the profession body said.

"The ATO must also continue to improve its public guidance so that tax agents and their clients have full visibility as to the information required and the factors which matter before they lodge their request," said Greco.

"Letters and other communications must be tailored for the taxpayer, contain reasons for a denial and list all the options for review of the decision."