Survey Results – Investigation into the effectiveness of the ATO’s communication of taxpayer rights to review, complain and appeal

1 September 2021

The Inspector-General of Taxation and Taxation Ombudsman (IGTO) Karen Payne, has released the results of her community survey^[1]Conducted between August 2020 and September 2020. into the effectiveness of the ATO’s communication of taxpayer rights to review, complain and appeal decisions and actions of the ATO – which can be found here.

“We are delighted to present an interim report primarily for the benefit of Taxpayers and the Tax Profession who took part in the survey ahead of the final IGTO report – to be released in October 2021,” said Ms Payne. “Both the survey results released this week, and the IGTO’s thought leadership article “When is the Commissioner of Taxation required to give a taxpayer reasons? … Understanding a Taxpayer’s Rights” will form part of the IGTO’s final investigation report,” said Ms Payne.

She said a key focus of the Survey was on what information should be provided – and what information is currently provided (or not) – to taxpayers and their representatives on their rights to review, complain and appeal decisions made. “The Survey has helped the IGTO to better direct our investigation into the relevant business lines and areas of communication within the ATO,” said Karen Payne.

The Survey was commenced in August 2020 and concluded on 30 September 2020. The IGTO invited taxpayers and tax professionals to participate in a voluntary and independent survey (conducted by Orima Research Pty Limited on behalf on the IGTO) as part of its investigation into effective communication of taxpayer rights.

Survey’s Early Signals

Ms Payne noted that the survey observations provided important early signals for the IGTO to identify those areas of ATO communication that should be explored in further detail as part of the investigation.

Based on the survey results and other complaint information, the IGTO reviewed a sample of 120 items of ATO correspondence templates and decisions between the 2019 and 2020 financial years, in relation to audit, Cashflow Boost, debt, objections and applications for early release of superannuation benefits.

Key Survey Results

• 96% of respondents said effective communication of taxpayers’ rights is either important or very important – refer Slide 19.
• The majority of respondents^[2]Overall, and for each taxpayer segment confirmed that the ATO regularly communicates Part IVC objection rights. That is, a taxpayer’s right to lodge a formal objection against certain ATO decisions in accordance with Part IVC of the Taxation Administration Act 1953.
• Overall, a smaller proportion of respondents rated the ATO’s communication as effective in the following areas – refer Slide 23:
  • The right to lodge an appeal with the Administrative Appeals Tribunal Small Business Taxation Division – 7%;
  • The right to lodge a complaint with the Taxation Ombudsman – 12%; and
  • The right to lodge a complaint with the Australian Taxation Office – 35%.
• This was the experience across a range of taxpayer groups (refer Slides 24 – 28) as shown.

Table 1 – Responses to Areas of effective communication

Taxpayer Group	Slide	The right to lodge an appeal with the Administrative Appeals Tribunal Small Business Taxation Division	The right to lodge a complaint with the Taxation Ombudsman	The right to lodge a complaint with the Australian Taxation Office
Individuals	24	10%	8%	36%
Business and SMEs	25	7%	5%	36%
SMSFs and Superannuation	26	12%	8%	50%
High net worth individuals	27	13%	13%	25%
Large private and public taxpayers	28	13%	13%	31%

 

• The community’s awareness of or use of other complaint channels and dispute resolution mechanisms was consistent across most taxpayer groups (Individuals, Small Businesses and High net worth individuals) – Refer Slides 43 – 48:
  • about 60%+ being unaware of or have not used the ATO complaints function; and
  • approximately 49% are not aware of or have not used the tax investigation complaint service of the Taxation Ombudsman.
• Across most taxpayer groups (Individuals, small businesses, debt, superannuation) there were generally consistent responses as to what information the ATO does typically provide in their communications – refer slides 49 – 57:
  • Approximately 36% of respondents indicated they do not get details of:
    • the decision maker;
    • contact details;
    • what information was considered; and
    • reasons for the decision.

Additional Feedback

The survey also provided an opportunity for the community to provide additional feedback.

• “Taxpayers should be made aware of their rights if they disagree with a decision made by the ATO and should feel confident that there is information available to support them to have a decision made by the ATO reviewed.”
• “Taxpayers have a right to be fully informed about all review/appeal options.”
• “ATO should clearly state the basis for a particular decision, the options available to the taxpayer, the information which must be supplied to the ATO for each of the options and the contact details at the ATO for each option.”
• “The ATO also needs to make the timelines for appeals / reviews clearer. This could be made clearer by including the particular due date by which an appeal needs to be lodged in relation to the decision (rather than just generic wording around timeframes).”
• “The ATO should provide the taxpayer with all the information the taxpayer needs to consider the taxpayer’s options and exercise any rights to question, challenge or appeal the decision.”
• “All Outbound letters should include a separate factsheet that detail all appeal options. There could be separate factsheets for tax, super, debt and different products within each subtype. People may utilise these options if the information is readily available.”

“We are excited to share some thoughts and observations about this critically important topic,” said Karen Payne. “The feedback we receive from stakeholders is invaluable in assisting us with planning and shaping responses to help the needs of Australian taxpayers, tax professionals, business and the wider community.” She said the IGTO looked forward to the release of the final report “An investigation into the effectiveness of the ATO’s communication of taxpayer rights to review, complain and appeal.”

Survey Snapshot – What they said

Respondents’ suggestions for improvements

The IGTO observed the following themes from the free text fields in the survey:

Clearer communication, clearer communication on timeframes for appeals and reviews

“ATO should clearly state the basis for a particular decision, the options available to the taxpayer, the information which must be supplied to the ATO for each of the options and the contact details at the ATO for each option.”

“The ATO also needs to make the timelines for appeals / reviews clearer. This could be made clearer by including the particular due date by which an appeal needs to be lodged in relation to the decision (rather than just generic wording around timeframes).”

Complete and written information on review rights

“The ATO should provide the taxpayer with all the information the taxpayer needs to consider the taxpayer’s options and exercise any rights to question, challenge or appeal the decision.”

“Every avenue available to taxpayer for any decision should be conveyed in written form thus allowing taxpayers to avail themselves of the most suited and appropriate remedy.”

Style and presentation – use of bolded font, different colour font to emphasise key actions

“Stylistic and syntactical choices could be improved to improve efficiencies. I.e. Bolding of key dates, emphasising key factors in the decision, communication of key actions items through differently coloured text.”

Separate factsheet detailing all review (formal/informal) options

“All Outbound letters should include a separate factsheet that detail all appeal options. There could be separate factsheets for tax, super, debt and different products within each subtype. People may utilise these options if the information is readily available”

Mediation and phone calls before decision is made

“There needs to be a mediation & consultation before ANY decision is undertaken”

More complete reasons for decisions

“Sometimes information considered and reasons are provided.  However, rarely complete.  Supports the outcome rather than the process.”

About the IGTO Survey

The survey was voluntary and consisted of 10 questions (3 of which related to the demographics of the respondents). There were 69 respondents but not all questions were mandatory to complete the survey.

The survey results can be found here.

For further information – Contact

Marjorie Johnston – Wordmakers
Mobile: 0407 329 430
[email protected]

About the IGTO

The IGTO is an independent, Commonwealth statutory agency that investigates taxation administration systems and laws, as well as the actions and decisions made by Tax Officials – of the Australian Taxation Office (ATO) or the Tax Practitioners Board (TPB). The IGTO seeks ‘to assure and ensure that there is fair, equitable, and transparent administration of the tax system consistent with community expectations.’ We also provide independent advice and assurance to Government on the taxation administration laws and systems.