Portal closure, using myGovID, TPB activity
21 November, 2019 | Steve Burnham
Portal closure, using myGovID, TPB activity
Steve Burnham: Welcome to Tax Wrap, the podcast of tax and super Australia. Each fortnight we present news and insights to tax and SMSF practitioners. If you’ve got any questions, comments, or even suggestions, get in touch at firstname.lastname@example.org.
Hello listeners. Welcome to the Tax Wrap podcast. We’re into episode 203. I’m your host, Steve Burnham. Today I have with me the Tax Counsel of Super Australia, John Jeffreys. Thanks for being with us John.
John Jeffreys: My pleasure Steve.
Steve Burnham: Now John you’re a member of the ATO’s Tax Practitioner Stewardship Group and also its Tax Practitioner Digital Implementation Group.
Steve Burnham: You meet with ATO reps and other body representatives, which is good because I mean hopefully you can tell us, there’s been a little bit of a concern I know in the things that I hear around the traps about the decommissioning of the taxation portal. So what can you tell us about that?
John Jeffreys: Yeah, Steve. Well there’s certainly a lot happening for tax agents at the moment. Apart from just getting the normal day to day done. But yes, if you haven’t heard of it and one would hope you would have by now, the tax agent portal that we’ve known and loved for many years is going to be closed on the 29th of November, 2019.
Steve Burnham: That’s soon. Very soon.
John Jeffreys: It’s very soon. Yes. There is a final decision that needs to be made by the ATO on doing certain things but you can just take it as read that that’s going to occur.
Steve Burnham: Right.
John Jeffreys: So from then on only the new online services for tax agents will be able to be used to get the tax information for all of your clients.
Steve Burnham: Right. Have most text agents made the change do you know?
John Jeffreys: Yes, the greater majority of tax agents have. However, there is still apparently a number which is still somewhat significant which the tax officer are a bit concerned about. Now they are making actual person to person calls to those agents to say, “Are you ready? Do you realize this is going to finish very soon?” So the thing is that anybody listening to this that hasn’t yet made the move, why don’t you do it as soon as you finish this podcast.
Steve Burnham: Yeah, good idea.
John Jeffreys: Because it’s coming soon and you really need to get onto it.
Steve Burnham: I was just going to ask, why are they doing this? Wasn’t it working? The portal?
John Jeffreys: The portal were a bit clunky I would say, would be the best I would say. But however it was technology from 15 years ago. The new online portal has a much nicer interface and you can get to information more quickly. I’d still hear people saying I can’t find this and I can’t find that. But largely I think that’s because of not fully understanding everything that’s available. There is a manual that is available for its use. So my strong encouragement is to get onto the new online services and enjoy all that it offers.
Steve Burnham: Right. The tax office also updating the system, what’s it called? Activity statement financial processing scheme or option, whatever it’s called, process.
John Jeffreys: Yes.
Steve Burnham: That’s coming after the update of the systems?
John Jeffreys: Yes. So the existing tax agent portal had to be shut down before the tax office engaged in this massive data processing event that will occur for them in December. Because of that and the way certain accounts are going to be shown or not shown to tax agents, the old portal had to be closed down.
Steve Burnham: Okay.
John Jeffreys: So the tax office will go through this very major data processing activity statement, financial processing process. It’ll mainly be an ATO internal operation, but there is now information on the tax office website where you can go and look and say, “Well, what does that mean for me?” that’s only just come out.
Steve Burnham: Oh good.
John Jeffreys: Yesterday actually.
Steve Burnham: Yesterday? It’s a pretty big job. It’s pretty big change, isn’t it?
John Jeffreys: My understanding or what I’ve heard is that it’s the biggest data processing activity the tax office has ever undertaken.
Steve Burnham: Gosh, well that’s saying something. I keep an eye on things that in passing every day I have heard some concerns about deceased taxpayer’s information in particular. There’s a bit of stuff that’s fallen through the cracks or it’s likely to in day job. What can you tell us about that situation?
John Jeffreys: So many tax agents will understand that in the online portal that is a, sorry, the new online services for agents.
Steve Burnham: Yeah.
John Jeffreys: You can’t get access to the information of a taxpayer who is an individual and was your client and died.
Steve Burnham: Right.
John Jeffreys: Whereas you can under the old portal. Now, why has it changed? Well, the fact is that the tax office has probably been doing something that wasn’t really in keeping with the law for many years. So in subdivision 355B of schedule one of the taxation administration act, this gives rules about what tax officers can and can’t give out by way of information.
Steve Burnham: Right.
John Jeffreys: The fact is that when you’ve got a deceased taxpayer, the person that represents that deceased taxpayer is the legal person representative.
Steve Burnham: That’s right. Yep.
John Jeffreys: Now, if that legal personal representative has not appointed the tax agent as the tax agent of the deceased estate and affairs, then under the law the tax agent is not supposed to get access to the information of the deceased individual taxpayer.
Steve Burnham: Okay.
John Jeffreys: Therefore for example, cannot complete the tax return up to the date of death.
Steve Burnham: That seems strange to me though, it’s the same person.
John Jeffreys: Yes. It’s because the person has ceased to exist so therefore the tax payer has ceased to exist.
Steve Burnham: I see.
John Jeffreys: A new one has arisen being the trust, of which the-
Steve Burnham: …the LPR…
John Jeffreys: …LPR is the legal representative.
Steve Burnham: I see.
John Jeffreys: So they are entitled. The law specifically states that they are entitled to the information.
Steve Burnham: Right.
John Jeffreys: So this is presenting a problem with the new online services. No doubt agents will be interested in what’s going to happen with this. So at the moment there is a workaround that is been worked on by the ATO. I’m not sure whether I’m at liberty to completely disclose all of that. So in this group that I attend I am under certain level of secrecy. But what I will say is that the tax payers, sorry, tax agents rather, that the ATO is very aware of this problem and is working on a work around on the issue. I will have to leave it to the tax office to come out with that information as to how they’re going to deal with it once the old tax agent portal is shutdown.
Steve Burnham: I suppose they can’t say too much until all the wrinkles are ironed out and it’s all going to work.
John Jeffreys: Yes, it’s quite a, in order to enact if you like the fix, there are some procedural things that have to be gone through from their point of view. Those things take time. But there is a fix coming, just watch the space. It’s basically to allow the LPR to be appointed to act on behalf of the taxpayer, the taxpayer being the estate because the person is no longer around to be-
Well, the LPR is the person who’s in charge. The question is whether the tax agent or more particularly the former tax agent of the deceased individual, whether they connect for that estate. The whole issue is around that as how that information gets to the tax agent of the deceased person. Now that information under the law must flow through the legal personal representative. So the fix the tax office is working on is in relation to this particular matter.
Steve Burnham: I can see what you mean when you say that the tax office may for a few number of years been doing the “wrong thing,” but it’s not, it’s been working, but still I can see how it’s not totally legal. Not being a practitioner myself, but I have been tending to confuse or mingle in the change from Aus key to My Gov ID with the closure of the portals. This is stuff that’s happening as well.
John Jeffreys: Yes. This is apparently quite prevalent that many people are getting confused with the shutdown of the taxation portal and the new online services, getting that confused with the idea of the decommissioning of the AusKey access into the portal. They are two completely different things. So the Aus Key is going to be decommissioned by the end of March, 2020.
Steve Burnham: Right, okay.
John Jeffreys: It’s going to be replaced by a more secure method of access called the my gov ID. Now first thing is don’t confuse the my gov ID with your my gov account.
Steve Burnham: With your own personal my gov account?
John Jeffreys: Yes. Some people have commented that maybe the government could have used a different terminology there.
Steve Burnham: Maybe. Yeah.
John Jeffreys: So one is an ID access into what’s intended to be all government services, federal government. My gov account is a different thing again, which is details about your particular accounts and so forth with the government. So the background to all of this is that the tax office were very concerned, and rightly so, that access to taxpayer’s information could be obtained by people too easily under the Aus key situation.
Steve Burnham: I see. Okay. Yep.
John Jeffreys: So what they wanted to do is to try and get the highest level of security they possibly could. So they’ve introduced the my gov ID. The idea is that a person must have a smartphone, a mobile device, and you apply through the app that is on the device and you have to verify your identity using your passport, driver’s license or Medicare cards. Then once you gain access then the app will use either fingerprints or facial recognition to say yes indeed that is you and you can get into the information that you want to access.
Steve Burnham: I think it’s on the mobile phone or facial recognition. Do all mobile phones have that function?
John Jeffreys: I think so. I think it will be built into the app. I actually haven’t used the app myself, but I think it’s built into the app.
Steve Burnham: Just for listeners some information that if you go to www.M-Y-G-O-V-I-D.gov.au it should all be there for you have a look at, I haven’t had a look myself yet, but I’ll do, I will do that. So the passport, driver’s license, the Medicare card, in the first instance, you’ve got to prove who you are and then you’re in with password or whatever.
John Jeffreys: Now some people have found that process easy and others not necessarily so. It depends sometimes on whether you’ve got hyphens in your name or if your, let’s say a woman using her maiden name for certain purposes and married name for another purpose. Those kinds of issues have created some problems. Other people have reported that it’s very easy to do, you can do it in no time at all. So it’s just that people are having different experiences.
Steve Burnham: Yeah, of course. So just to clarify, this is not just for the ATO business, it’s all government?
John Jeffreys: Yes, that’s right. So it’s also for the ABR register, Australian business register again. The idea of this is that although the tax office is leading the charge with this, it will be the way to gain access to all of government information for the federal government.
Steve Burnham: When think about it, I mean this is, did you say March next year? Although the online services for agents is happening-
John Jeffreys: Very soon, yes.
Steve Burnham: This week. So I mean I’m thinking would it be wise to do the my gov ID thing before, say, Christmas?
John Jeffreys: Well yes. I think that’s a good idea Steve. Where I think the listeners might take the encouragement, maybe if you’re with an accounting firm, you might shut down over Christmas. Maybe you might just want to try and get the my gov ID thing done before you shut down because you can come back after Christmas and people are away for a while and then all of a sudden it’s February and then you’re into the next reporting period and so on. All of a sudden it’s March and you are under the pump.
Steve Burnham: That’s right.
John Jeffreys: So maybe as a bit of a Christmas present to yourself if you like. Get it all done by Christmas.
Steve Burnham: Not only that, always when I come back in January, I’m always a bit stupid for that couple of weeks. [“just two weeks Steve?”]. So there’s also, John, myGovID, there’s another authorisation…
John Jeffreys: Yes. So one of the questions that people have is, for example, what do I do if someone leaves or so on? So there will still be the relationship authorisation manager. So someone appointed in the practice will say who can get into the information and who can’t. So if someone is going to terminate their employment, well then you need to remove their authorisation. Of course, there’s a few practical, actually, practicalities to look at. We’ve seen the issue of who’s got a phone.
Steve Burnham: Yeah. Does, in a firm, does that one phone operate the firms access?
John Jeffreys: No, indeed, that is frowned on greatly to having the communal phone in the accounting firm.
Steve Burnham: Okay.
John Jeffreys: Because it will be one individual’s ID. So if the communal phone is used in an accounting firm, it will mean that one individual is allowing everybody else in that firm to access their myGovID records and so forth. So the idea is that each person has their own mobile phone. Now some people don’t have mobile phones and that’s an issue. Some firms are saying, “Well we’ll we have to buy mobile phones for all of our staff.”
Steve Burnham: Yes, of course.
John Jeffreys: There’s the issues about the tax deductibility. “I’ve got to have one, is it then tax deductible?”
Steve Burnham: True. yeah. I’m sure that will be tried.
John Jeffreys: Yes. One of the major issues is the question, offshore employees.
Steve Burnham: Of course.
John Jeffreys: Or alternatively foreign employees coming to Australia who may not have the requisite Australian passport, driver’s license, Medicare card. Now again, the tax office have got fixes for these things and I’d encourage you to look on the website address that Steve mentioned before.
Steve Burnham: What if you lose your phone? I mean, I guess-
John Jeffreys: If you lose your phone, well you’ve got to get another one and you’ve got to go through the process again.
Steve Burnham: I suppose. All right. Actually Tax & Super Australia have, we thought it wise to take the temperature of the marketplace and we’ve put together a survey that we will send out to members very soon. Probably, perhaps at the end of this week but certainly next week. So please, if you could help us out by filling that survey in, that’d be great. John, also the tax practitioner board are always active.
What’s what’s happening in that sphere? I know that you had mentioned off the air before. There were some other changes driven by the TPB that you might like to share.
John Jeffreys: So one of the things that I’ve been saying recently is that I think one of the major moves in the tax agent space is the increasing activities of the tax practitioners board. Much of this is good and right, but having said that they are beginning to really become more prominent and understanding what they’re doing, the tax practitioners board. Their attitudes towards tax agents that aren’t doing quite the right thing is something that really needs to be understood. Now, we all know the tax agents operate in a difficult environment. You have the pressures of the tax office, you’ve got the pressures of the tax practitioners board and you’ve got the pressures of clients and in all of that mix you have to make money so that you can eat.
Steve Burnham: Yes.
John Jeffreys: So all of that is a difficult thing and tax agents have got to, maybe wouldn’t use the word cut corners but decisions have to be made to make things more efficient-
Steve Burnham: Make efficiencies.
John Jeffreys: If you concede that. You’ve often got to do that when there isn’t full information involved. But then when the tax practitioner board comes along with 2020 hindsight, sometimes that can be a bit difficult to explain. So just be aware that this is coming or this greater-
Steve Burnham: Scrutiny?
John Jeffreys: Scrutiny, yes. What we are particularly waiting for now is the report into the tax practitioners board, which is being headed up by Keith James, which is now with the government and we’re waiting for the government to release that report. That report is something that I would recommend most tax agents read because it is going to directly affect the way you work in the future.
So the whole question of penalties on tax agents and many things, education and so forth are going to be covered in that report and we obviously will be pouring over at ourselves. But just be aware of that.
Steve Burnham: Is that imminent?
John Jeffreys: Well no one officially knows but it could be, yes. I think it was delivered to the government the end of last month. Now we’re just waiting for when it will come out.
Steve Burnham: Okay. Well I’ll ask you after the Christmas and New Years, but who knows?
John Jeffreys: Who knows?
Steve Burnham: [inaudible 00:19:11], but the beach side reading or supplement.
John Jeffreys: Okay.
Steve Burnham: All right.
John Jeffreys: Now one thing I also just mentioned is that the tax practitioners board, I was in a meeting with them yesterday, mentioned that tax agents still are getting their annual declarations in late. Apparently 17% of them, still a percentage of tax agents. So there’s an annual declaration that you will all know and love that you have to make and apparently still many are getting that in light.
So again, if I could encourage you just to get onto that.
Steve Burnham: Right. Okay. Well it’s good to know you’ve got to keep on top of these things. Also, John, just briefly you were mentioning that there was a case that just happened and it was pivotal somehow. Could you explain that?
John Jeffreys: Well, I actually only just read this just before this podcast. It’s a case of Stephen Madz, M-A-D-Z, where the tax practitioners board terminated the registration of this agent who had been an agent for 40 years. Now they did it because he had not lodged his tax returns on time or [inaudible 00:20:21] on time. But I think the point I just wanted to note here is that the tax returns with the year ended 30 June, 2017 and 2018 and the decision to terminate his registration occurred in May, 2019 which wouldn’t have been all that long after the person had to lodge the June 18 return.
So the point is that the tax practitioners board is moving on these things. I suspect that there are a number of other agents out there who might be a little bit behind on their income tax returns and also business activity statements, which this particular man was behind with. Look, he had a bit of a rough trot. He moved premises and had very difficult technology issues. Sometimes he didn’t get his mail from the ATO. He was just overwhelmed by the pressure of everything. The reading of it is that he’s done the right thing over 40 years.
Steve Burnham: Oh so he’s not not a young guy. He’s been in the game for awhile? Okay.
John Jeffreys: I don’t know how old he is, but one would say [crosstalk 00:21:34]. But he was obviously very sad about this being the case. So his registration as a tax agent was originally to be 18 months, but the AAT reduced that down to 12 months. It’s just an indication of just how assertive the tax practitioners board is becoming now that the particular individual maybe could have helped himself a lot more than he did. But nevertheless it’s, he had a bit of a rough trot and despite this, these actions were still taken. So it’s just a salient real warning I think to all of our members and listeners to make sure you get your affairs in order and indeed if you can get your own affairs in order first.
Steve Burnham: Oh you want [inaudible 00:22:23], okay. Yeah. Because that’s been an issue hasn’t it? I was going to say, but what can you do? How can you mitigate the risk of that?
John Jeffreys: Yes. I know that we all love to serve our clients and we all like to make sure that we keep up with their needs. But the thing is that if you are the registered, then you don’t get any income and don’t get to help your clients. So I think there has to be a mind shift for tax agents. Get your own things in order, first of all, and then look at your clients.
Steve Burnham: Yeah, just get cracking. All right John, thanks very much. That was all very enlightening. Thank you listeners once again for listening to the Tax Wrap podcast. We’ve enjoyed having your company. Thanks again, John.
Tax Wrap taps into the insights afforded TSA’s Tax Counsel John Jeffreys, who has a chair at the table of the ATO’s Tax Practitioner Stewardship Group and its Tax Practitioner Digital Implementation Group