People driven to accountants by tax pack ‘flop’
The Tax Pack was a disaster for the Tax Office. Introduced two decades ago to empower Australians to prepare their own tax returns rather than using agents, the magazine-style document did the opposite.
Ahead of the new tax year, commissioner Michael D’Ascenzo has told a Senate hearing the package led to an increase rather than a decrease in the number of people using accountants to prepare their returns. The agents themselves were partly to blame.
“In the very first edition of Tax Pack we used plain English terms,” he told the Senate. “And there were a lot of complaints from professional bodies that the plain English terms were not precise. We started to use precise terms and what happened since then was a spike of people moving from doing their own returns to using tax agents.”
“You can bamboozle ordinary taxpayers by trying to be too legalistic and trying to cover every situation.”
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The introduction of e-tax, where details are hidden behind computer links, has reversed the phenomenon.
“From a high of 75 per cent of individual returns going to tax agents, we are now down at around 71 per cent,” Mr D’Ascenzo said.
This year more data from employers, banks and share registries will be “pre-filled” on electronic tax returns.
“We are encouraging organisations to send data to us earlier than they are legally required to,” said first assistant tax commissioner Sue Sinclair.
This year for the first time taxpayers using e-tax will receive pre-filled data from Centrelink relating to paid parental leave and eligibility for the education tax refund.
Ms Sinclair said this year the ATO would pilot pre-filling information about share sales “to remind taxpayers about capital gains tax events which may have occurred during the year”.
Ms Sinclair said the computer problems that plagued the Tax Office last year were in the past.
Read more: http://www.smh.com.au/small-business/finance/tax-pack-flop-drove-people-to-accountants-20110606-1ford.html#ixzz2oLm5wHwi
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