Clients of firm B were approached about buying into the scheme Firm B then

Clients of firm b were approached about buying into

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firm A developed a product with some bugs in it. Clients of firm B were approached about buying into the scheme. Firm B then reverse-engineered the scheme into an improved version and ‘made noises to our contacts in the ATO’ about the bugs in firm A’s version. Some advisers and some HWI staff did not see the need for the ATO to initiate communication. These advisers said their experience was that they could telephone the taskforce and discuss any question that was concerning them. A number of other advisers had not had this experience, however. They found great difficulty in securing the communication they felt they needed, and in some cases, any communication at all. Another option for improving communication is suggested by the Canadian Audit Protocols (Revenue Canada, 1996). The Canadian Audit Protocols are not just about a move to real time audits; they are also about rewarding cooperative relationships between the tax authority and its clients with negotiated audit protocols that reduce compliance costs for business and increase compliance effectiveness for the tax authority. For example, scheduling visits by different areas of the tax authority so that disruption to business is minimised, conducting concurrent audits, and informing business in advance of the form in which financial records might be kept to avoid their double handling. The idea is that Revenue Canada and participating corporations jointly produce a written framework that establishes guidelines for the relationship and the audit process. When a HWI is targeted for an audit, it seems quite possible and sensible to give their adviser an audit plan, with the proviso that they might be advised at any stage that the plan has been modified. Indeed, we were told this is generally done with HWIs, though not always in a timely fashion. Complexity Half the advice I see people give is wrong...McKinsey and Co showed some years back that the ATO’s advice on the basic matters dealt with at the enquiry counter was right only thirty per cent of the time; thirty per cent of the time it was wrong; and forty per cent of the time it was useless and beside the point. I know twenty per cent of it by working twelve hours a day, six days a week for twenty years. The Commissioner would have to take two weeks off to get up to speed in what he is talking about in that trust stuff. And he should not have to. The Act should not be so complex that only those below him have the understanding of the law to run and control agendas. There was consensus among advisers that the complexity of the law was keeping compliance costs high for HWIs and making effective enforcement difficult for the ATO. There was general support for the idea of discerning general principles in the law and disciplining specific elements of the law to be consistent with these general principles. The idea is that all components of business tax law should be
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256 Taxing Democracy derived from, and consistent with, a smallish set of general principles. There was
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  • Fall '16
  • tax authority, Australian Taxation Office, Tax Office, Compliance Model

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