Saturday, April 17, 2010

Could things get worse for the Tax Office? Maybe. They'll be an inquiry.

The government has ordered the Inspector General of Taxation to inquire into the "confusion, frustration and anger" surrounding the new Tax Office computer system, but in the process has created more confusion.

Announcing the snap inquiry on Fairfax radio Friday morning Assistant Treasurer Nick Sherry said the Inspector General would carry out a "thorough investigation" into the problems that have delayed up to one million tax returns and reportedly pushed businesses to the wall.

But the man appointed to cary out the inquiry, Inspector General Ali Noroozi said he hadn't been given terms of reference or the resources with which to conduct the inquiry.

"Obviously its an issue that affects a lot of taxpayers and something I have to do but I have a number of reviews on foot, and I only have 7 staff and that includes me and a secretary," he told the Herald.

"We will do it and we will do our best to do a good job but what I need to do is to discuss with the Minister's office resourcing and priorities."

An internal Tax Office memo seen by the Herald refers to "confusion, frustration and anger" noting that it received 1233 calls of complaint in a three day period this month, compared to just 43 complaints in a similar period in February.

"It should be noted that calls sampled indicated heightened emotions in both taxpayers and staff," the memo says. "Three of ten complaints reviewed on one day related to a taxpayer under mortgage sttress or about to lose their home. Other stresses include the inability to pay mounting bills or in one case having to cancel a child's surgery."

The memo confirms the computer sent letters to many people telling them refunds had been paid into their accounts when in fact they had "not nominated bank account details."

Separately yesterday the Office confirmed its computer had sent out 140,000 letters referring to an enclosed cheque when no cheque was enclosed.

Installed over the Australia Day long weekend the new computer replaced more than 180 systems, some more than three decades old.

Fifty per cent over budget and behind time the $800 million computer system was meant to be operating smoothly by March when the new wave of company tax returns came in.

Businessman Evan Jones told Fairfax Radio he had been waiting since January for a $150,000 cheque and had had to lay off all of his staff.

"They said the cheque's in the mail, the cheque's at the printers, and my personal favourite was; when I called them back to say I had to lay off all my staff, their response was - are they valuable staff?"

Independent Senator Nick Xenophon said his deepest concern was that when personal tax time began on July 1 "the system will be unable to cope".

Published in today's Age

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