Following a COVID-19 hiatus, the ATO is workingthrough its debt book and contacting clients and theiragents to address unpaid liabilities. The best way toresolve tax debts is to talk with the ATO and arrangea workable payment plan, otherwise Director PenaltyNotices or disclosures to credit bureaus may follow.In some situations, the client may also need to bereferred to an insolvency practitioner or supportfor small business restructuring.Many practitioners have experienced pressuresin their lodgement programs for the past two years.Practitioners who are still struggling to manage2020-2021 tax returns are advised to considercontacting the ATO to discuss their situation andoptions.COMPLETING THE TAX RETURNThe range of services provided by tax agents expandseach year, and it’s a good idea for practitioners toregularly review their letters of engagement, ensuringthat they properly reflect the terms and scope of theengagement and the specific tax agent services beingprovided.This may include whether or not the practitioner willperform any follow-up action required by the client orthe ATO, or whether the engagement includes assuranceof tax records.The ATO is gathering and data-matching moreinformation than ever. Maximise the use of informationthat is available and ask clients about unexpected itemsor large variations from prior years. Take theMANY PRACTITIONERS HAVE EXPERIENCED PRESSURES INTHEIR LODGEMENT PROGRAMS OVER THE PAST TWO YEARS.PRACTITIONERS WHO ARE STILL STRUGGLING TO MANAGE 20202021 TAX RETURNS ARE ADVISED TO CONSIDER CONTACTING THEATO TO DISCUSS THEIR SITUATION AND OPTIONS.opportunity to confirm their communication preferencesand help them transition to digital communication.The increased low- and middle-income tax offset isexpected to drive many individuals to their tax agent tolodge straight away. With some pre-fill details taking upto mid-August to become available, it is important tohighlight the risks of early lodgement to clients,including amendments and penalties.The ATO’s tax gap work has highlighted significantnon-compliance with car fringe benefits. Discrepanciesbetween GST and income tax amounts also attractattention from the ATO.When preparing a tax return, take the opportunityto review and reconcile accounts for other obligations,such as GST and fringe benefits tax to identify andcorrect errors.Be aware that the ATO and Tax Practitioners Board(TPB) client verification guidelines have been finalised,so it is important to ensure that proof of identityprocesses satisfy the new requirements.As always, keep in mind the Code of ProfessionalConduct for tax agents and the TPB guidance onreasonable care, supervision and control, andoutsourcing and offshoring.CLICK HERETO ACCESSCPA Australia’s taxtime resourcesCLICK HERETO LISTENto this story asan audiocastintheblack.cpaaustralia.com.au June 2022 9
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