CPA Australia has expressed concern following claims of a “tick and flick” approach to audit decisions by the Australian Taxation Office.
In a statement of claim filed last week, Serene Teffaha, a senior ATO lawyer engaged as a tax technical specialist, alleged senior figures at the ATO, including the Commissioner of Taxation are guilty of wilful misconduct and culpable negligence.
The whistle-blower claims the ATO issued staff a formal target of ensuring taxpayer objections to audit decisions were upheld in less than 20% of cases, irrespective of merit, and that she was instructed that the ATO’s audit decisions should receive a “tick and flick” and affirm those decisions without appropriate consideration of the merits of each individual taxpayer’s objection.
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Mark Morris, senior tax counsel at CPA Australia, told SmartCompany that taxpayer objections to audit decisions need to be heard on their merit.
“Clearly the start point is the process needs to be transparent and reasonable. The more complex a matter is, the more grey it will be, the more sophisticated an issue, the more difficult it is,” Morris says.
“All objections should be determined on a fair, transparent and reasonable basis and that is paramount to the integrity of the system.”
Morris says the potential use of percentage targets by the ATO is “a dangerous concept”.
“Irrespective of the quantum involved, all cases should be heard on their merits,” he says.
Gavan Ord, CPA Australia business policy adviser, says there should not necessarily be a percentage target.
“The ATO needs to make sure when it makes an assessment it is a quality assessment that has a strong basis in law,” he says.
Morris says claims the ATO adopts a “tick and flick” approach to audit decisions are concerning.
“Everything should be determined on technical merits and tick and flick suggest you haven’t done an analysis of the issues,” he says.
“Both the Tax Office and profession can see merit in the alternative dispute resolution process and we support the ATO’s initiative in this approach, although this is easier to roll out at the big end of town,” he says.
“We are all for trying to expedite conflict to save resources for both the client and profession.”
The ATO declined to comment as the case brought by the whistle blower is ongoing.