How the IGTO can help your clients

Recently, the Inspector-General of Taxation and Taxation Ombudsman (IGTO) investigated a case involving a mother whose adult daughter had passed away. The mother was having trouble finalising her daughter’s deceased estate with the Australian Taxation Office (ATO) because she was unable and not eligible to acquire a Letter of Administration, so was not recognised as a legal personal representative by the ATO.

After much discussion, and after pointing out the numerous issues highlighted by the IGTO’s recent review Death and Taxes: An Investigation into Australian Taxation Office Systems and Processes for dealing with Deceased Estates, the IGTO convinced the ATO to re-consider the complainant’s circumstance. The release of the estate monies to the complainant was finally approved.

This was just one of over 800 investigations launched by the IGTO in the 2022-23 financial year. Right now, the 18 investigators within the IGTO are sharing a caseload numbering 360 – an average of 20 cases each. Every case means a great deal to the individual who has approached the IGTO.

Having operated since 2003, and since inheriting the function of the Taxation Ombudsman in 2015, the Inspector-General of Taxation and Taxation Ombudsman (IGTO) now has oversight of the Australian Taxation Office and the Tax Practitioner Board. It is a body that can and does make powerful change. Its goal is to make the tax experience better, fairer and more engaging for all.

To help IPA members better understand how her organisation works, Karen Payne, Inspector-General of Taxation and Taxation Ombudsman, spoke with IPA General Manager Technical Policy Tony Greco.

Tony Greco: What is the IGTO’s purpose and main goal?

Karen Payne: Our goal is to ensure there is fair, accountable and improved administration and integrity of the tax and super systems for the benefit of the Australian community. Our purpose is to independently investigate and report what we find, with recommendations.

If you lodge a complaint with us as a taxpayer, or as a tax practitioner, we will investigate and report to you privately. But we can also report publicly, either because we conduct a review investigation or because we see something in the private investigation that we think is in the public interest to be reported.

We report ideas, opportunities and recommendations for improvement of the system. That transparency and reporting is part of the accountability framework.

TG: Can anybody lodge a complaint?

KP: Yes, any taxpayer or tax practitioner can get in touch. It’s important to understand that we don’t challenge the amount of tax assessed or how much tax you should pay, we instead review administrative decisions and actions. So, if you’ve applied for an extension of time to pay your tax debt and ATO says no, and they won’t give you reasons for why they’re saying no, or for why they’re denying your deduction, etc., we can investigate that.

TG: Does most correspondence come from individuals, tax agents or organisations?

KP: About 75% of our cases come from individuals not in business. It’s interesting that around 74% of all taxpayers – individuals and businesses – use the services of tax agents, but only five per cent of our ATO complaints in FY23 were represented by accountants and tax agents. I think one of the reasons for that is that tax agents sometimes don’t know that we exist.

The more people who know we are here and can help, the more accountability there will be in our tax system, and the better the governance model.

TG: What types of complaints are most common, and how many do you receive?

KP: We’ve had a lot of complaints that the ATO is refusing to release money for First Home Super, and of delays in responding to a request for ruling. We also hear a lot about Director Penalty Notices, which is about debts to directors personally, but on behalf of the company.

The directors are trying to join the dots and figure out why they owe this debt. People speak with us when the Tax Office is not communicating well with them – for example, not coming through with a payment plan, and around other points connected with the administration of tax debts.

TG: Alongside investigations, how much of your team’s work is teaching people how the tax system works?

KP: Our key function is to conduct investigations. A base level of our work is education, because we need to help people articulate the nature of their complaint. But I would say the role of the Tax Office is to educate taxpayers.

It’s their job to provide clear guidance on tax. That’s not our principal role. And remember, we are 30 people and the ATO is 20,000 people. However, part of our role is to educate the Tax Office on where its own communication is falling down.

TG: So, your department makes a measurable difference to ATO processes?

KP: Fundamentally, that’s our role in the system. We’re here to independently observe the experience of taxpayers, and whether they’re getting fair and accountable decisions. Where we see opportunities for improvement, we provide the evidence and expect to see that improvement.

TG: How can accountants help you?

KP: Accountants play a very important role in our very complex tax system. In terms of the IGTO, even if accountants don’t want to be the representative that brings an issue to us, there’s a role they can play in helping their client to understand that we are here to help. It might not be profitable for the accountant to be involved, but they can help clients understand that if they want to take this further, or if they want something investigated, then here’s the opportunity.

Also, at the IGTO we’re trying to improve tax administration. Accountants are experiencing the tax system every day. So we want to hear about their experiences and what it is that they would like to see improve.

TG: What makes you so passionate about your work?

KP: We’re helping resolve problems for people who don’t know how to navigate the system or get a good result. There’s a lot of personal satisfaction, and all members of my team very much identify with our purpose.