Tax return lodgments: Are you going to miss the bus?

By John Jeffreys, Tax Counsel

I am very aware that many of you will have great difficulty in meeting the 85% lodgment requirement of the ATO for tax returns for the year ended 30 June 2020. Many of you are saying that it is impossible to meet lodgment targets.

With this being so obvious, why doesn’t the ATO permit a blanket extension of tax returns for the year ended 30 June 2020? This is a good question, and Tax & Super Australia have been making submissions to the ATO regarding this. I want to give you the latest information on this issue.

The ATO response
The ATO has advised that it is not looking to implement a blanket deferral for the 15 May ITR due date.

The ATO’s point of view is that not all practitioners want a deferral. Blanket deferrals would cover the largest practices with substantial resources right through to sole practitioners, and it would be difficult for the ATO to segment its systems in this regard. The ATO prefers to offer a tailored approach to all tax agents to cater for individual circumstances.

The ATO has advised me that its lodgment figures reflect consistent lodgment patterns over the past few years, and fewer deferral requests this year compared to the same time last year. However, the ATO appreciates that some agents are struggling and says that it is committed to assisting agents who require assistance through tailoring services based on their needs.

The ATO has tailored services for agents who are experiencing significant lodgment delays through its Supported Lodgment Program, and it encourages agents to utilise this service if they need. The ATO encourages tax agents who are facing difficulties to contact the ATO so that it can work with agents and understand their personal circumstances.

All agents have an automated concession available to them where they are able to lodge by 5 June as long as any liabilities are paid by this date. Of course, the ATO encourages those who can lodge and pay on time to do so.

The ATO further advises that agents can request an ATO assessed deferral. Please refer to the ATO website for more information about how to apply for deferrals.

Prior to the due date, if an agent lodges an agent-assessed deferral, if deemed low risk, the deferral is usually approved, unless: 

  • the client has a record of late lodgments, including poor compliance with deferred due dates
  • the ATO has commenced lodgment compliance action with a client
  • the agent is not listed on the ATO systems as the authorised agent to act on the client’s behalf
  • the agent requests a deferral from the 5 June concessional lodgment date

 My comments
I suspect that the ATO does not fully appreciate what a time-wasting, revenue reducing exercise applying for individual lodgment extensions can be (as evidenced by comments from members in one of this week’s Daily Updates). However, the tone of the ATO information is that it will try to work with tax agents where an agent is experiencing difficulty with their lodgment program.

My best advice is that if you think you are going to have a difficulty with any aspect of your lodgment program is to contact the ATO early.

I appreciate that this is a very stressful time for you with seemingly no outlet from the pressure. I trust that the ATO will be true to its word and be extremely understanding of the plight of tax agents. If you have a different experience, please let us know.

This article may not seem of much assistance to you, but I felt it was incumbent upon us to let you know that we have been lobbying on your behalf, and to provide you with the latest ATO information about your lodgment program.

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Website Comments

  1. Senthamangalam Venkatramani
    Reply

    I realise that neither equity nor symmetry of treatment go with ATO. But as it is not illegal to wish for the impossible, how about:
    1) A counter-part to Part IVA whereby the taxpayer can tear through the ATO schemes for contrived revenue collection as a sham and prosecute the ATO?
    2) The ATO writing to individual taxpayers for forbearance, waiver and ‘no action’ against defective administration before breaching its own obligations under the law and its Taxpayer’s Charter?

    Pigs will fly as soon as the borders open…

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