Accountants Daily recently ran a poll asking its readers whether they feel like they're entitled to compensation when the ATO portals fail.
Of 1,113 respondents, 74.8 per cent said yes, and the remaining 25.2 per cent said no.
National Tax and Accountants' Association (NTAA) CEO Geoff Boxer told Accountants Daily that he believes accountants should be entitled to compensation when the ATO portals fail.
“In extreme cases where the tax agent can demonstrate quantifiable losses directly attributable to the failure of the ATO portal then there should be a process which provides for compensation or other concessions in favour of the tax agent or the client affected,” Mr Boxer said.
While this is his belief, Mr Boxer admits that the chances of the ATO offering compensation are slim.
“The ATO always advises any request for compensation will be judged on its merits,” he said.
“However, in our experience it is rare for a tax agent to receive compensation for loss of their time and efficiency due to ATO systems issues.”
The Tax Institute senior tax counsel Professor Robert Deutsch told Accountants Daily that he understands why tax professionals feel they deserve financial compensation.
“Up to a point, portal failures must be tolerated as a fact of modern life. However, when the problem becomes endemic such that there are repeated and on-going failures which impact on the day-to-day work of tax professionals, claims for compensation become louder and louder,” he said.
“In that context, it is unsurprising that practitioners are calling for compensation. Measuring the amount of such compensation is difficult to quantify and may be more likely to arise in the context of smaller practices where back-up processes are not necessarily available.
Prof Deutsch warned the ATO that these calls won’t go away unless they prove the robustness of their systems moving forward.
“I think if things don’t change for the better there will be a clarion call for compensation which will begin to come from the politicians under pressure from some of their constituents,” he said.
“The ATO needs to get ahead of that and ensure its systems can cope and operate in an efficient seamless fashion so as to improve the portal experience of practitioners. On-going failures cannot continue to be tolerated indefinitely.”
This debate started up during the downturn, when there were various calls across the industry for the ATO to consider compensating accounting and tax professionals for significant productivity losses.
In June the ATO released a report into the widespread systems outages it experienced in December 2016 and February 2017, in which the ATO addressed these calls.
To address any disadvantages experienced by stakeholders, including accountants, the ATO used discretions and remedies available under the tax and superannuation laws. These included deadline extensions and adjustments to interest and penalty charges.
“Whilst some stakeholders raised the issue of compensation in their submissions or in meeting with us, to date, we have received only a handful of claims,” the ATO said in its report.
Moving forward Mr Boxer is calling on the ATO to be more transparent regarding its systems.
“The ATO could be more upfront in acknowledging portal instability/failures and continue to provide blanket extensions of time to lodge for tax agent clients affected by outages,” he said.
“There could also be more communication with tax agents about the bigger picture in terms of their plans improving portal performance.”