Small shopfront accountants throughout the country are worried.
Some have been losing business and fear it will get worse as more Australians – egged on by the Tax Office – move to self-lodge their tax returns.
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While most Aussies still call on their trusted tax adviser at tax time – of the 12.8 million Australians that lodge every year about 9.4 million use a tax agent to help file their return – the Australian Taxation Office is pushing people to ditch their tax agent for simple tax returns and instead use its online system myTax.
The move towards self-lodging is inevitable. Technology is changing the way taxpayers worldwide interact with tax authorities.
![The development of myTax has been a sore point for shopfront accountants.](/web/20170204194711im_/http://www.smh.com.au/content/dam/images/g/u/3/i/8/2/image.related.articleLeadwide.620x349.gu2w99.png/1486026692578.jpg)
During the past few years, the ATO has spent tens of millions of dollars on marketing aimed at convincing people to file their own returns online.
Although the results are yet to fully pay off – as of June 30, 1.8 million individuals had lodged using myTax 2015, which is just 725,000 more than myTax 2014 – the ATO hopes that in time this number will leap.
A utopian world
The push is all part of Tax Commissioner Chris Jordan's desire for greater "willing participation" by taxpayers.
It is a utopian world where the majority of Australians self-lodge online and it assumes 95 per cent of them do so honestly and correctly.
![Bean counters are worried about losing business as more Aussies self-lodge tax returns.](/web/20170204194711im_/http://www.smh.com.au/content/dam/images/g/u/3/i/6/q/image.related.articleLeadwide.620x349.gu2w99.png/1486026692578.jpg)
If that is the case, there's no longer a need for bean counters to advise on simple tax returns. Instead, they become a business consultant with tax expertise.
Mark Chapman, a former tax adviser and once senior director at the ATO who now heads tax communications for H&R; Block Australia, says the development of myTax has been a sore point for shopfront accountants.
![Tax Commissioner Chris Jordan.](/web/20170204194711im_/http://www.smh.com.au/content/dam/images/g/q/x/i/s/s/image.related.articleLeadwide.620x349.gu2w99.png/1486026692578.jpg)
Theoretically, it's a good thing for agents to get up to speed with technology, he says, but many feel the ATO is pushing them to do so too fast, when it cannot get its own IT systems right.
"The ATO invested heavily into getting myTax right and put a lot of marketing might behind it," Chapman says.
It's been a real source of irritation to see the ATO pushing themselves so hard in that market.
Mark Chapman, H&R; Block spokesman
"Small accounting firms can't keep up with that spend. They aren't able to market themselves [to taxpayers] the way the ATO are able to. And a lot of the people the ATO is targeting are the clients of the smaller firms and firms like H&R; Block."
"It's been a real source of irritation to see the ATO pushing themselves so hard in that market. These agents have lost clients and there's a lot more agents feeling unsettled."
Push too fast?
Although the ATO has focused recently in improving its correspondence with tax professionals, Chapman says there's still a perception that the ATO gives greater priority to myTax than to tax practitioners.
The aggressive move towards individuals self-lodging via myTax happened at the same time as the ATO revamped systems for tax professionals.
The ATO wants agents to use a new lodgement system for putting in their clients' tax returns – called the Practitioner lodgment service (PLS) – as well as a new online-based portal (Tax Agent Portal) that can be used by tax agents to access ATO systems and client records, and to communicate with the ATO on behalf of clients.
In both cases, the move hasn't gone smoothly. It's a big part of why on Tuesday, Inspector-General of Taxation Ali Noroozi – the man who effectively keeps watch over the ATO – announced that as part of his work program for the year ahead, high on his list was examining "the future role of tax professionals in the tax system, particularly in light of increased use of digital technology and ATO service delivery initiatives".
It was most telling that it wasn't Noroozi who had picked this as a key focus, but Jordan himself. "The IGT is conducting this review in response to a request from the Commissioner of Taxation," Mr Noroozi said upon the release of his work program.
The review, Noroozi said, would be "forward-looking", examining their future, as well as "concerns raised by tax practitioners".
Angry agents
Tax agent complaints hit a peak in 2015 when angry taxpayers took to social media to slam the ATO's slow systems at tax time, just as they were about to lodge clients' completed returns.
A parliamentary committee later noted that tax agents complained of losing business, productivity and suffering damage to their reputation because of the "unreliable" and "unstable" website.
Tax Services Australia has also described the portal as "variously and regularly unavailable, slow, and extremely costly for tax professionals to interact with".
Chris Jordan used his keynote speech at the Tax Institute last year to address the elephant in the room.
He acknowledged that when it came to the ATO's dealing with the profession "we haven't always got it right from our end".
He had heard the tax profession's concerns loud and clear, and had arranged for ATO officers to visit major cities and towns nationwide, offering more face-to-face support.
Pledge to keep fixing
Despite his pledge, IT problems have continued to plague the ATO.
In December IT outages that lasted for days sent taxpayers into a frenzy.
Groups such as the Institute of Public Accountants – whose members are mostly people running small accounting firms – called for compensation for accountants' lost time and productivity.
"Reassurances are now falling on deaf ears of our members when the portal goes down for two days this week," IPA chief executive Andrew Conway said in a statement on December 14, when the outages were occurring.
"Our members have highlighted to us on many occasions that they have suffered productivity loss, missed deadlines, and incurred irrecoverable costs as well as damage to their reputations and relationships with their clients."
Jordan was once again forced apologise to the profession and announced PwC would conduct a full independent review into the technology crash.
"The ATO always like to put a good spin on things," Chapman says, although he adds it has also been "quite receptive and always prepared to listen" to criticism.
He also welcomes Noroozi's review. "At the end of day, the ATO are going to do what they're going to do, irrespective of feedback from the tax profession."
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