ATO apologises for income tax return delays

IT systems upgrade issues causes delays, ATO issues apology

The Australian Tax Office (ATO) has issued an apology for delays in sending out 2008-09 income tax return notices of assessment as a result of an upgrade to its IT systems.

In a statement posted to the ATO website, second commissioner, David Butler said the agency acknowledged the frustration experienced by the delays.

“I would like to reassure tax agents and the community we are doing everything we can to issue outstanding notices of assessment for 2008-09 income tax returns and I apologise for any inconvenience you have experienced,” Butler says on the website statement.

“We know some people have experienced delays and frustration caused by our essential systems upgrade. Unfortunately, the size of the systems we deal with means they are incredibly complex. Also, given the importance of the tax and superannuation systems to Australia, we need to ensure the reliability of our processes. We appreciate the patience and support people have shown us.”

After weeks of speculation, the ATO announced at the last minute of its 22 January, 2010 deadline that it would go ahead with changes to the National Taxpayer System, which has been used since the 1970s.

In place of the old system will be a new income tax processing system, which extends the ATO's "integrated core processing (ICP) system to income tax and higher education loan accounts (HELA)".

The upgrade is part of the agency's broader Change Program, which aims to migrate it away from more than 180 legacy and paper-based systems to a single, integrated core IT system.

The program has, however, been hit by delays and budget blowouts, forcing the agency to publicly acknowledge it was under “extraordinary pressure”. There has also been significant online criticism of the role key ATO partner Accenture has played in the program.

The ATO's annual report, submitted in October last year, revealed the Change Program was high risk and mostly responsible for the office’s budget overspend last financial year.

The ATO said the upgrade was progressing smoothly and expected to have the new system fully available for staff to use from 15 February.

The latest setback is another blow to the ATO’s IT reputation. Although steadily increasing the volume of returns being processed throughout February, the ATO said on 9 March it found “a problem with the data in some notices of assessment which had been printed but not sent to taxpayers. Unfortunately, this meant we could not send anything for printing and posting until we fixed the problem.

It took us longer than expected to fix the problem and we recommenced sending notices of assessments to be printed and posted on Monday 22 March”.

Despite the apology, the ATO maintains the upgrade has been a success.

“While we have had some problems, you would expect that with an implementation of an IT system as large as this one. There have been no critical systems problems. Overall, the new income tax processing system is working well and, as the figures demonstrate, the vast majority of processing has been completed,” the website statement reads.

“We know some people have experienced delays and frustration caused by our essential systems upgrade. Unfortunately, the size of the systems we deal with means they are incredibly complex. Also, given the importance of the tax and superannuation systems to Australia, we need to ensure the reliability of our processes.”

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