Moving up the organisation until a more senior cooperative person is found who

Moving up the organisation until a more senior

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Moving up the organisation until a more senior cooperative person is found who will instruct the junior obstructionist to cooperate can be time-consuming. But it is less time-consuming than escalating prematurely to setting up an arbitration or litigation, or leaving the problem to fester. More and Escalating Regulation Options to Enforce Compliance The ATO has in recent years made considerable movement down this path recommended by the ATO Compliance Model. Following the external evaluation of the Large Case Program 5 (Pappas, Carter, Evans and Koop, 1992), the ATO moved from full audit as a more or less standard single compliance product to a suite of audit products: roll-over audits, pre-lodgment audits, last year lodged audits, specific issues audits, loss tracking audits, new legislation/ruling reviews and record retention audits. Industry watching briefs and tax strategy reviews (which are risk assessments rather than audits) also became important fieldwork tools. The suite of products provide greater choice and flexibility to better target risk treatments; and taxpayers, subject to enforcement, can experience varying types of fieldwork contact, making them more careful in their tax affairs. Even if they have a full audit in one year, they cannot rule out some special purpose audit in the next year. The ATO Compliance Model is a compliance pyramid, with cooperative and educative compliance options at the base escalating to progressively more enforcement-oriented and punitive options as we move up the pyramid. The philosophy is to consider cooperative strategies first and only escalate up through each layer of the pyramid as each lower level of the pyramid fails to deliver compliance. This raises the question of why not try reward at the base of the compliance pyramid. Some ATO staff and corporates considered it improper to reward large business for what was seen as meeting their legal obligations. This concern seems especially apt in light of experience with other areas of regulation where financial incentives to meet legal obligations have engendered some perverse incentives to deliver the form, but not the substance, of what is intended to be rewarded. The ATO, however, can make a special effort to give a service ‘beyond the call of duty’ to clients who have an exemplary record on compliance and cooperation in making the tax system work. For example, they could be given extra quick turnaround of advisings. Indeed, it might only be as particularly trustworthy taxpayers that they could be given this: Mutual trust enables an advisings process to be transacted more time-efficiently. The time-efficiency can be achieved by increasing ATO preparedness to accept the corporate’s tax analysis and relying on verification of selected key components of that analysis. The service of the Key Client Manager, an officer dedicated to one corporate taxpayer, could also be viewed in this light.
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  • Fall '16
  • tax authority, Australian Taxation Office, Tax Office, Compliance Model

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