Tax Freeze danger of thaw
The tax office may soon end the freeze on tax liabilities on 7000 as-sessments for tax-effective schemes, according to tax commissioner Michael Carmody.
Unless scheme promoters co-operate with the tax office, the freeze might be reneged, Carmody told Melbourne planners at a recent FPA lunch.
Last August, the tax office gave investors the option of not having a liability raised until the matter was considered by the courts.
"This offer was made on the assumption that we could get an early Fed
The tax office may soon end the freeze on tax liabilities on 7000 as-sessments for tax-effective schemes, according to tax commissioner Michael Carmody.
Unless scheme promoters co-operate with the tax office, the freeze might be reneged, Carmody told Melbourne planners at a recent FPA lunch.
Last August, the tax office gave investors the option of not having a liability raised until the matter was considered by the courts.
"This offer was made on the assumption that we could get an early Federal Court hearing on the matters and that the promoters actively work with us," he said.
"In some cases the promoters have been less than forthcoming in pro-viding us with the evidence we require and in others there has been a marked reluctance on the part of the investors to put themselves for-ward as representative cases."
Carmody says that unless progress is made this month, the tax office will reconsider its offer.
The deductions that have been disallowed relate to 40 schemes with more than 13,000 investors. More than 3000 have accepted amended as-sessments.
Carmody has also blamed promoters for delays in granting product rul-ings for investment schemes.
He cited an afforestation scheme where the tax office spent a week studying the documentation and then received amended lease and man-agement agreements, trust deeds and purchase documents.
"This not only meant that consideration of this application had to start again, but it impacted on our ability to consider other appli-cations," he says.
Currently, the tax office is taking between four to six weeks to check an application for product rulings and Carmody warns that many applications received now will not get a ruling before June 30.
"We have yet to see the perfect application," he says. "Some lack even the most basic information such as financing details."
The delay in processing product rulings has been attacked by the Aus-tralian Society of CPA, saying the tax office should fix its "ram-shackle system" of evaluation.
"The product ruling process is good in theory, but has become bogged down in bureaucracy and avoidable delays," says CPA Financial Plan-ning Centre of Excellence chairman Mike Gehde.
"The tax commissioner has tried to blame applicants for the delays, saying their documentation is not in order, but this is just a smoke-screen," he says.
"We know of many properly documented applications that have been in the system for six months. The whole process is a shambles."
Carmody says there are more than 50 staff working on product rulings and he argues the time needed to process each application depends on full disclosure by the applicant.
Ends
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