Small and family business minister Michaelia Cash has asked ASBFEO Kate Carnell to review historical cases where a small business is disputing an assessment by the ATO and the agency has commenced early action to recover the debt.
The review will not include live cases currently before the Administrative Appeals Tribunal.
“I want to ensure that the Australian tax system is fair for small business. By having ASBFEO conduct this research, it will be able to gather a holistic picture of how current systems impact people running small business,” Ms Cash said.
“Although I understand that the ATO will not enforce recovery of the tax debt other than in exceptional circumstances, there may be cases where the errors have occurred, and this has substantial consequences for these businesses, which needs to be avoided.”
Ms Carnell said her office would provide advice on the scale and extent of the problem for small businesses and the potential impact on them.
“Overzealous early debt recovery by the ATO can be a small business killer,” Ms Carnell said.
“Our research last year into unfair treatment by the ATO found serious system-wide issues impacting the small business sector, including early debt recovery.
“We heard from a number of small businesses devastated financially from this practice, which is made all the worse if the ATO gets it wrong.”
The review comes as a string of new measures have been implemented to balance the perception of fairness at the Tax Office when it comes to dealing with small business taxpayers.
These include a new tax concierge service at the ASBFEO offering a discounted consultation with a tax lawyer, and a new dedicated small business taxation division within the AAT which will provide closer assistance for taxpayers in dispute.
The Tax Office have repeatedly defended its administration of the tax and super systems, with ATO Second Commissioner Jeremy Hirschhorn most recently telling a Senate estimates hearing that the agency does not issue assessments on a ‘willy nilly’ basis, despite conceding that its auditors get around 1,000 cases wrong each year.