Accountants Daily can reveal that 60 per cent of the 112,000 tax returns that were corrected by the ATO in July and August this year were lodged by tax agents.
Earlier this week, the tax office announced that more than 112,000 tax returns were corrected in the first two months of tax time 2018, totalling more than $53 million.
The amount of corrected returns is about 2 per cent of the 5.8 million tax returns that have been lodged so far.
Speaking to Accountants Daily, ATO Assistant Commissioner Colin Walker explained that the corrections were based solely on pre-fill data.
“The corrected returns are essentially corrected on the basis of pre-fill data and the three top errors are omitting bank interest, omitting salary and wage, and omitting government pensions or allowances — all of those three things are sitting in the pre-fill data,” said Mr Walker.
Accordingly, Mr Walker believes there may be a variety of reasons causing tax agents to slip up with the usage of pre-fill data, including not rechecking pre-fill data at lodgement time or simply failing to utilise pre-fill data.
“Interestingly, it’s not generally going to be a situation where the client has not provided all of the information, because we are only checking against pre-fill data and pre-fill data that we have a high level of confidence in its veracity,” said Mr Walker.
“It could be that the client has come into the office, they pull the data, they have the discussion with the client, they complete the return, the client signs the return maybe a week later, which is not unusual, and then the agent needs to check that pre-fill again to make sure that it is complete. That’s one example of how you can have an omission.
“Or it could be that the agent actually hasn’t actually pulled the pre-fill data and they’ve gone on whatever information the client has provided them and certainly where you’ve got a product that doesn’t provide the pre-fill, then the agent needs to go to the tax agent portal and extract it from there.
“That could open up a few things: one, that they didn’t do that; and two, that it was pulled earlier than the lodgement; and the third thing is you could have transposition errors because you’re actually getting the data out and moving it across into the return.”
To prevent such errors, Mr Walker suggested extracting as much detail as possible from clients, as well as checking pre-fill data as close to lodgement time as possible.
He also noted that such corrections were done automatically before assessments, meaning that there would be no penalties or debts involved for both tax agents and their clients.