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Compensation for ATO outage possible

Tax agents and practitioners affected by last year’s prolonged ATO online outages could take further action to possibly obtain compensation for the adverse impacts on business productivity and damage to client relationships.

During a session at the Institute of Public Accountants (IPA) Victoria Congress in Creswick last week, a number of delegates asked about any recourse for compensation for the time, work and effort practitioners had lost as a result of the outages, in addition to loss of trust and integrity with clients.

Inspector-General of Taxation (IGT) Ali Noroozi said compensation was certainly a route practitioners could take whereby the independent statutory agency, which reviews systemic issues at the ATO, could produce a report with recommendations to reimburse those affected.

However, Noroozi stressed the office of the IGT required a critical mass before investigating the matter.

“To date, the level of complaints to my office about the outages does not warrant that kind of action, but if it does get really bad, yes, it’s possible,” he said.

“I’m not shy to look at issues such as this – in 2010, we completed a review into the ATO’s Change Program and the repercussions of that.

“Because you’re saying, for example, that the ATO did not make enough effort, what I can do is find out whether the commissioner has taken into account all the relevant facts, so we’ll go through all their records to see how they arrived at that decision.

“But I cannot tell the commissioner how to exercise discretion. It’s the commissioner’s discretion.”

IPA technical policy general manager Tony Greco said the organisation was aware of its members’ concerns.

“It created a lot of heartache, it created a lot of reputational damage and loss of productivity. It basically stopped activity,” Greco said.

“Some of you had clients that wanted an ABN (Australian business number) and you couldn’t provide it for two weeks and it was a start-up, so a simple thing like not being able to get an ABN was significant.

“The ATO has driven us to go down this digital platform, so they’re compelled to give us functionality.

“That’s their job, so if we don’t get it [functionality], we’re within our rights to say it’s not good enough.”

He revealed the IPA surveyed its members outlining the “impacts of the outage in the real world” and provided it to the ATO, resulting in a report being prepared by pwc, which will explain the nature of the hardware malfunction.

“The ATO reserves its right to sue Hewlett Packard and as to what they do with that compensation, there are some suffering agents who were adversely impacted and we’ve made it very clear who we’d like that compensation directed toward,” he said.

During the following plenary session, ATO assistant commissioner Jennifer Moltisanti said in response: “I will reiterate the commissioner’s sentiments said at the recent Senate Estimates [Committee] – we are confident that we’ve got a sustainable system leading up to tax time.

“The system’s outages were very unfortunate. We do have a contract with Hewlett Packard and the hardware went down. It was an unprecedented event.

“I would like to correct on the record that we did not send staff home and we did not know how long the systems were going to be down for.”

Moltisanti added the ATO had indicated where there were grievances, it should be informed.

“But to date, I’m not sure if any grievances have come forward,” she noted.

“I can’t speak on compensation, but if there are some serious grievances, which are supported by evidence and quantified, we are more than happy to look at that.”

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