New IT system delays tax returns

STILL waiting for your tax return? Join the club, so are 500,000 other taxpayers including some who are about to lose their homes because of the delay.

Local tax agents, who are not paid by clients until they receive their returns, have told The Northern Star they were also finding it increasingly difficult to pay staff due to the lack of cash flow.

The problem stems from the decision by the Australian Tax Office to install a new IT system.

It was supposed to be in operation by Australia Day this year, but has been dogged by problems.

Assistant Treasurer Senator Nick Sherry, who has oversight of the ATO, instructed the inspector general of tax to investigate the ongoing bungle on Friday.

The investigation was announced just hours after the ATO confirmed it had sent out 140,000 assessments to taxpayers last week without refund cheques.

Some taxpayers have been waiting up to four months for their returns.

A confidential ATO memo published in The Australian last week conceded thousands of taxpayers were ‘becoming desperate over serious cash flow problems’ due to the delay in receiving their returns.

“Other stresses being felt by the community reliant on refunds include the inability to pay mounting bills or in one case having to cancel a child’s surgery,” the memo said.

“Both tax practitioners and taxpayers continue to report cash flow issues due to the delays in issuing refunds. Some taxpayers are becoming desperate.”

With community anger over the delays growing, the ATO has swung into damage control.

“Millions of returns are not delayed,” it said in a statement issued Friday.

“The new (IT) system is working well. We have already sent out over 1.1 million notices of assessments, of which 684,000 were refunds.”

It said some returns had been delayed due to tax debt owing by individuals, an obligation to the Child Support Agency, incorrect information on the return, and people lodging several years of returns at once.

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