Accountants have flagged that they may sue the Australian Tax Office (ATO) over problems related to the implementation of the income tax component of the office's IT revamp, the Change Program.
The objective of the Change Program had been to migrate away from the ATO's decades-old technology platform and on to a more modern architecture that will deliver the agency improved flexibility in the way it conducts its business. Processing income tax began to be handled by new systems in January, but problems with the systems have led to long delays processing tax assessments.
Head of accountancy referral service accountantsRus, Adrian Raftery, said tax agents could seek compensation for the glitch, which had cost them time and money.
"In the past four months, accountants have spent a considerable amount of non-chargeable time, had their goodwill and reputation damaged, increased stationery costs and experienced their own cash flow issues whilst waiting for payment for services," he said in a statement on Saturday.
Raftery said some taxpayers had even lodged complaints against their agents, believing they had pocketed refunds for themselves instead of passing them on to clients.
"There is no doubt that accountants will unfairly experience a churning of clients next year due to these dramas," he said.
Independent Senator Nick Xenophon on Wednesday called for an independent inquiry into the ATO's computer system problems, a call which appears to have been answered.
"I've asked the inspector-general of Tax to carry out a total and thorough investigation, I've asked him this morning, of the implementation of the IT change and its impact," Assistant Treasurer Neil Sherry said on Neil Mitchell's 3AW radio program on Friday morning.
"...he will carry out a thorough investigation, he's independent, he will carry out a thorough investigation and he will determine who is responsible."
The news came on Friday as ATO second commissioner David Butler, who is broadly responsible for the Change Program (or, as the ATO has re-branded it, the Change Agenda), on Friday sought to provide more information about the initiative in the face of ongoing criticism of the processing delays recently being suffered.
"Millions of returns are not delayed," he said in a statement on the ATO's website. "The new system is working well."
Butler said the ATO had already sent just over 1.1 million notices of assessment to individuals since the system started processing notices in mid-February, of which 684,000 were refunds. He said that some refunds had been delayed because of various issues, such as an individual having a tax debt owing or they had an obligation due to the Child Support Agency and/or Centrelink.
In other cases, there might have been errors or a lack of required information in the submitted tax return, or someone had lodged several years' worth of outstanding returns with their documentation last year.
Butler said the ATO's staff were putting in an "extraordinary effort" to minimise the impacts of any delays on the community (working extended shifts and overtime), and an additional 320 people had been brought on to help deal with the problem. In addition, he said, the ATO was in the process of bringing on an additional 500 temporary staff over the next few weeks.
The Change Program has been running since 2004, when it had an initial budget of $445 million. This has since increased by several hundred million, both due to increased legislative scope of the reform, but also budget overruns. The ATO's major partner for the initiative is IT services giant Accenture.
Sherry said that the ATO's IT platform had been "struggling for the last five to 10 years". "There had been instances two or three years ago I can recall, because I was in opposition and I was asking the ATO about a backlog of payments, for example an area called the Surcharge Superannuation Tax and Co-contribution," he said.