ATO criticised over tax schemes
The Commonwealth Ombudsmen has released a report calling on the Australian Taxation Office (ATO) to supply more information to investors caught up in mass marketed tax minimisation schemes.
Releasing the body’s annual report today, Ombudsman Rod McLeod claimed the ATO had refused to supply more information to investors on why decisions to allow or disallow claims related to tax minimisation schemes had been made, despite a specific request from the ombudsman’s office to do so.
“I believe the ATO could do more to negotiate a satisfactory position with these complainants, in the interests of the individual complainants and tax administration more generally,” he says.
A Senate report released in late September was also critical of the ATO’s handling of mass marketed schemes, concluding that there were problems with the ATO’s treatment of individual taxpayers who invested in the schemes.
The Senate report also pointed to concerns about the ATO’s response to the rise of a large scale market for the schemes before it acted to disallow tax deductions from the schemes.
The tax commissioner, Michael Carmody, has been roundly criticised in the past for taking up to four years to disallow some of the schemes.
The schemes, some of which had in fact been around for more than 10 years before the tax office made an adverse ruling against them, are believed to involve over 60,000 people, many of whom have now been left with tax bills and penalties running into the tens of thousands of dollars.
The tax office currently has 115 scheme promoters or advisers under investigation in relation to agribusiness, franchise and research tax minimisation schemes, and others under investigation in relation to film, book, investment and live theatre schemes.
The schemes, which became prolific in the latter half of the 1990’s, have cost the tax office $1.4 billion in uncollected taxes, according to ATO assessments.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
