Accountants Daily understands that the ATO has now sent out erroneous tax debt notices to taxpayers, warning them to pay incorrectly applied unpaid general interest charges (GIC).
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Apologising for the error, the ATO has now advised that taxpayers and their tax agents will not have to act on the mistake.
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It is understood that the ATO is working to ascertain the amount raised and the number of taxpayers affected.
The ATO has acknowledged that the glitch comes from its recent Activity Statement Financial Processing (ASFP) project, which saw more than 17 million activity statements and franking deficit tax accounts move into the accounting system currently used for income tax.
“Following a change to the system we use to process activity statements in January this year, we identified some taxpayers who had a general interest charge (GIC) incorrectly applied to their accounts,” an ATO spokesperson said.
“We are resolving this as a priority and are in the process of remediating the affected clients’ accounts. The ATO will work with affected clients as appropriate and will ensure that no collection action will be taken on these accounts.
“No action is required from taxpayers or their representatives, and accounts will reflect the correct balance once remediation is completed.”
The IAIS Program was initiated after the ATO was rocked by system unreliability issues between December 2016 and February 2017, leading to the House Standing Committee on Tax and Revenue referring to the year as an “annus horribilis”.
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