Friday, April 02, 2010

Why is the Tax Office sitting on your refund cheque?

It could be because it's waiting for its computer to tell it its okay to release it

Waiting for a tax refund that just wont come? It could be because you are known to the Child Support Agency.

The Tax office has revealed that since Australia Day it's been sitting on refund cheques for thousands of parents known to the Child Support Agency because of a problem its computers have had communicating with the Agency's.

Although it has been able to pay out the money but hasn't in case the CSA wanted it to withhold some.

"Normally before issuing a refund to someone known to CSA we check to see if the CSA needs us to deduct money," said Tax Office Assistant Commissioner Jenny Reid. "We might owe someone $100 but the CSA might want us to take out $20 for them to hand to the other parent."

"Since we turned on our new computer over the Australia Day weekend it hasn't been easy for the two to systems to talk to each other... So we have been withholding all the refund cheques for taxpayers of interest to the CSA."

The good news is the Tax Office believes the technical issues have been fixed. Those refunds should start flowing on Tuesday.

But a much greater number of returns, around one million, have been caught up in backlog that began at Christmas when the Tax Office turned off its old computers, some several decades old, in order to transfer data to the new system which was turned on on Australia Day.

In an update posted on the ATO website late Thursday Second Commissioner David Butler explains that rather than shrinking the backlog grew because of a second problem involving printers.

"On March 9 we discovered a problem with the data in some notices of assessment which had been printed but not sent to taxpayers," he says. "Unfortunately this meant we could not send anything for printing and posting until we fixed the problem. It took us longer than expected and we recommenced sending notices of assessments to be printed and posted on Monday 22 March."

The backlog of one million has shrunk to 366,000, about 150,000 of which would normally be running through the system at any one time.

"We know some people have experienced delays and frustration," the update says.

"Unfortunately, the size of the systems we deal with means they are incredibly complex. Also, given the importance of the tax and superannuation systems to Australia, we need to ensure the reliability of our processes. We appreciate the patience and support people have shown us."

Mr Butler has promised to pay interest interest on overdue refunds, saying that is normal procedure.

"Interest will be paid on all late refunds after the 30th day. People do not need to ask for it, we will calculate it and pay it with the delayed refund," Mr Butler said.

Published in today's SMH and Age

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