Win for tax agents in public stoush with commissioner

ATO boss Chris Jordan’s recent public statements against tax agents have attracted the attention of the Inspector-General of Taxation (IGT), who believes it “wasn’t the most prudent course of action” without the use of factual data to back it up.

At the Institute of Public Accountants (IPA) National Congress on the Gold Coast last year, Mr Jordan said over 900 audits showed tax agents were contributing to Australia’s individual tax gap through “carelessness, miscalculation and simple mistakes”.

More recently, at the Tax Institute’s National Convention last month, Mr Jordan took another swipe at tax agents, saying the results of its random enquiry program showed incorrect claiming was worst in agent-prepared returns as compared to self-prepared returns.

“Some display a lack of competence, or outdated knowledge and practices, or do not take proper care when undertaking their work; others are deliberately scamming or cheating the system,” said Mr Jordan.

“These results are really disappointing. For years I’ve heard how tax agents were guardians of the system – these random enquiry results tell me this is not the case for some agents.”

Fronting the standing committee on tax and revenue, IGT Ali Noroozi fielded questions from MP Jason Falinski, who asked if it was appropriate for tax agents to be put in the spotlight without data to support those claims.

“It perhaps wasn’t the most prudent course of action. It would have been best to have released the facts at the same time,” said Mr Noroozi.

“I think it would have been preferable for the facts to have been shared and the basis for which those comments were made when they were made. It’s a relationship that can, at times, be fragile.

“But, as you say, those comments at the Tax Institute conference have stirred up a reaction from tax practitioners.”

According to the tax office, the work-related expenses gap is estimated to be greater than the large corporate tax gap of $2.5 billion, but has yet to publish actual figures.

Mr Falinski further questioned the appropriateness of the Tax Office to be making comments that could lead taxpayers to self-lodge in preference to using a tax agent.

“I don’t think the commissioner’s remark was saying, ‘Don’t use tax agents.’ He did say that this is what the result of their random audits are, but I do agree that he did not produce the factual basis,” replied Mr Noroozi.

In his reply, Deputy Inspector-General of Taxation Andrew McLoughlin said the IGT was not going to favour sides but would be navigating those issues in its ongoing review into the Future of the Tax Profession.

“With respect to people having choice of service, if people believe that they need independent advice and support, then we’ve always supported that as an office,” said Mr McLoughlin.

“We aren’t about trying to pick favourites, but we do support the central integrity of the system, which is obviously dependent upon having an administrator that is capable of managing the core functions.”

6 thoughts on “Win for tax agents in public stoush with commissioner

  • April 6, 2018 at 5:33 pm

    Ever since I started in the tax profession I have doubted that the ATO really supports Agents and that they appear to view us with contempt.

  • April 6, 2018 at 6:05 pm

    There some very poor tax agents but how about support for the competent agents
    a general attack on agents is very poor

  • April 6, 2018 at 9:32 pm

    I have always believed that if you make accusations, you better have the facts ready to back it up, otherwise you will just look like a fool. Next time Mr Jordan intends to front up at a forum and make such claims, perhaps he could offer some supporting evidence. Even better, offer some insight or solutions.

  • April 6, 2018 at 11:12 pm

    Mr Jordan obviously has never conducted a tax interview with a client and prepared a tax return. What he does not acknowledge is that tax agents are not auditors, we advise our clients of what they are entitled to claim and take the information that they provide us at face value. If tax agents demanded proof of every tax claim every individual client wanted to claim in their tax returns we would not be able to sustain a healthy and competitive business . My practice had one of these random audits for a client that I have personally prepared returns for. My client travels for work related training three or four times a year, during her annual interview she would advise me I travelled x amount of km’s this year. In the random audit the ATO asked for her place of work to provided them with written evidence of her work related travel. She had over claimed her km’s as she had, one not taken care to clock the actual distance and two claimed one too many trips during the year audited. Not once during this audit did the ATO try to establish whether this error occurred due to my negligence or my clients! So what I want to know is, did the ATO establish what percentage of the tax agent prepared returns that contained miscalculations were due to the tax payers errors, or the tax agents? And if not as I suspect is the case how can these audits reflect an accurate outcome that would support Mr Jordan’s statements ?

  • April 9, 2018 at 9:57 am

    The IPA should get onto Mr Jordan’s case and tell him to pull head in! Most tax agents I am sure are trying to do the right thing by both their clients and the tax system. Simple mistakes can happen, as if the tax office don’t make mistakes! At the end of the day, clients pay our fees, not the tax office, and we will always do the best for our clients within the law. Until there is a complete overhaul of the tax system we will contine to struggle ensuring “simple” mistakes don’t happen.

  • April 9, 2018 at 12:37 pm

    Assume Chris is correct some tax agents not doing their job property, what remedial and preventive action has he taken to correct this situation ? Doing nothing and let this situation continue is also unfair to those honest tax agent.

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