Change Program cited in one in eight ATO complaints

The Commonwealth Ombudsman has identified a "systemic issue" with the Australian Taxation Office's $725 million IT refresh after having received 27 percent more complaints about the ATO this year.

In its 2009-10 annual report (pdf) published this week, the Ombudsman reported having received 195 complaints relating to the ATO's problematic Change Program.

Those complaints accounted for 12 percent of the total number of complaints about the ATO, which had increased 27 percent from the 2008-09 year to reach a five-year high of 1,810.

The ATO has not yet responded to iTnews' request for comment about any complaints the agency had received directly and its plans for improvement.

A spokesman for the Ombudsman said this year's increase was "significant", although it was difficult to separate complaints due to the Change Program from those with other causes.

Tax return delays drew the most complaints from taxpayers and tax professionals, who were losing patience, the Ombudsman reported. More than one million tax returns were said to have been delayed by issues including data integrity.

Most delays were found to result from "suppressions" - notes on a taxpayer's account that prevented a tax return from being finalised.

Some of these suppressions were due to "identified systems problems which the ATO is addressing as the processing year progresses," the spokesman noted.

"Reasons for these complaints may appear to be caused by 'bedding- down' problems with the new system and may also reflect the ability for ATO staff to address issues on a new system that they are less familiar with," he told iTnews.

"While the ATO failed to meet its service standards in the beginning of the financial year, it now appears to be meeting its standards, but it appears that people are less tolerant of any delay from the ATO than in previous years."

When questioned on the ATO's progress, the spokesman said the ATO reported in June 2010 that it was "very confident that the new system was well prepared to cope with tax time".

The Ombudsman planned to conduct an in-depth analysis of complaints, to produce a report in the new year.

It also noted a general increase in complaints about audit conduct and debt issues, and data matching or administrative errors that led to the compromise of taxpayer identities.

The Ombudsman recommended that the ATO ensure that its advice to taxpayers was consistent with public statements made by the office, and that all internal areas and stakeholders were aware of identified problems and workarounds.