Below is a message to members from the ATO:
The ATO advises that:
- The processing of current year returns is progressing well and refunds are issuing as expected
- The volume of income tax returns lodged since 1 July is on par with last year
- The latest processing figures will be available in ATO Progress Report 6 (income tax returns since 1 July 2011) which will be released on Thursday 11 July 2011.
- ATO service levels remain in the mid 90% range
- Approx 1.6 million calls have been handled since 1 July 2011.
The ATO continues to identify returns containing potentially fraudulent or over-stated claims. The main items attracting attention continue to be false payment summaries and questionable claims for spouse offsets and the education tax refund (ETR).
Concerns with the time advised to review returns
ATO's use of risk models helps them to detect overstated or fraudulent claims for refunds.
Since 1 July 2011, they have stopped over 49,000 returns with total refunds claimed of around $190 million that are believed to include overstated claims or be potentially fraudulent. Of these nearly 22,000 returns have been prepared and lodged by registered tax agents (total refunds claimed $98 million).
Each return stopped has been identified as containing some information that requires verification prior to issuing a notice of assessment. As data supplied by other parties continues to become available (such as payment summaries from employers) we regularly re-examine these returns and to date have released some 5,600 returns where they have been able to verify the information contained in the return that we were unable to do at the time of lodgment.
For those returns where this type of verification is not possible the ATO is issuing review letters to taxpayers or their tax agents asking them to provide supporting documentation of their claims and where appropriate a satisfactory explanation as to how their claims relate to their income earning activities.
To date some 12,000 reviews have commenced or are currently with compliance officers with the review letters about to issue. Given the increased numbers of refunds that have been stopped so far this year compared to last year we are developing strategies to vastly increase this number in the coming weeks, focussing on those returns where tax agents may have the documentation and explanations to verify claims. The ATO expects to commence reviewing the remaining taxpayers within the 12 weeks from lodgment timeframe previously advised.
Upon receipt of our review letter it would be appreciated if responses and documentation were provided in a timely manner to assist the ATO in reviewing claims. The ATO will continue to update Professional Associations on the progress of our strategies.