An Australian Tax Office distribution problem has stopped many Australians from promptly receiving their $900 cash bonus from the Federal Government. Worse, they may be charged by their tax agents before they can take delivery of their stimulus money.
Crikey understands that thousands of direct deposits from the ATO have mistakenly been sent to tax agents on behalf of their clients. This has led to tax agents devoting considerable resources to attempt to reconcile the payments and distribute them to their clients. And the money spent by agents on additional wages and postage costs is not being reimbursed by the ATO.
Additionally, sources have told Crikey that tax agents are, in some circumstances, withdrawing fees from their clients’ economic stimulus payments in order to cover processing fees resulting from reconciling the clients’ payments.
But if tax agents are receiving these payments regardless of their clients’ wishes, isn’t it the responsibility of the ATO to cover any associated costs?
A spokesperson from the Australian Tax Office told Crikey that of the 22,000 active tax agents in Australia, nearly 5000 opted not to receive the tax bonus payment on behalf of their clients.
Of this 5000, approximately 400 agents have contacted the ATO with concerns that the payments were sent to them incorrectly.
These cases arose “…as a result of either Tax Office error when processing the agent’s opt-out option or incomplete information provided by tax agents,” said the spokesperson.
“In all cases we will arrange to stop payments to agents as soon as we are notified, however, agents could still receive payments for another 48 hours if the payments were already in progress,” said the spokesperson.
“Where the agent is not able to forward the payment to their clients, they can return all payments to the Tax Office and we will issue replacement payments directly to clients.”
This process, however, will take up to another seven days for a replacement cheque to be send to the client.
It is unknown how many tax agents, however, are withdrawing processing fees from their client’s stimulus payments. Crikey understands some agents are charging approx $22 but the ATO would not confirm a specific number, telling Crikey that that figure was to be determined by individual tax agents. “Any fee charged by a tax agent is a matter between the agent and their client.”
According to the ATO, individual contract arrangements between tax agents and their clients will determine whether or not the bonus payments can be used to offset any bills owed by a client to a tax agent.
This is confirmed by CPA Australia, who told Crikey that there is no rule or regulation that would prevent a tax agent from charging a processing fee. However, arrangements between individuals and their tax agents as to the payments of fees should be agreed prior to an assignment taking place.