«A report to the Assistant Treasurer Inspector-General of Taxation October 2013 Review into aspects of the Australian Taxation Office’s use of ...»
• not disclosing offshore dealings with overseas entities, especially low-tax jurisdictions and tax havens that allow banking secrecy
• using complex structures and intra-group transactions to minimise tax
• transactions where the tax and economic outcomes are inconsistent
• poor governance and risk-management systems
• distortions and inconsistencies in market valuations and apportionments
• business performance falling outside small business benchmarks (for businesses with turnover of up to $15 million).
We take these characteristics into account when developing our view of potential risks and determining our compliance approach.
A12.1 The following checklist should be used in the design and implementation of the ATO’s compliance risk assessment tools.
1. What is the risk event you are seeking to manage? This may be framed in terms of the 4 pillars of compliance or with reference to an existing enterprise risk.
2. What governance arrangements do you have in place?
3. What documentation and record controls do you have in place?
6. What is the expected strike rate and average adjustment?
7. What evidence do you have to support expected strike rates and adjustments?
8. Have you undertaken any testing or trials to test the accuracy of your inputs?
9. Do you have processes in place to ensure your inputs are regularly reviewed in light of compliance activities?
10. Which compliance effectiveness methodology will you be using to evaluate the effectiveness of your risk treatment?
TRANSPARENCY AND COMMUNICATION
12. What general information will you provide publically about your approach?
13. Is there any information that you should provide to a group of taxpayers?
14. At what point will you communicate with a particular taxpayer?
19. What evidence do you have to support the expected behavioural responses? For example: pilots, user testing, randomised controlled trials.
22. Have you communicated the risk hypothesis to the taxpayer?
23. Are your expectations of the taxpayer clear in your communication?
27. How will you distinguish between different levels of risk?
28. How will you distinguish between different types of risk or concerns, for example inherent, behavioural or information confidence and cost?
30. Are you able to use ‘case refinement’ products to reduce the numbers of taxpayers subject to higher intensity compliance activity?
31. Do you have a strategy in place to escalate lower risk cases to higher intensity compliance activities where higher risks are confirmed?
32. What are the planned resources for your risk treatment plan?
Page | 198 Appendix 12 — Quality assurance checklist for compliance risk assessment tool design
33. What timelines are you expecting for your risk treatment plan?
34. How many cases are you anticipating will be created as a result of your risk detection methods?
35. If there are any unexpected changes to any of the above parameters, what are your priorities?
36. To what extent are you willing or able to extend the time taken to action the cases?
37. How will you manage timeline changes in terms of managing ATO staff and taxpayer expectations?
38. To what extent are you willing or able to reduce the cases you action or change the way you action them?
39. Have you identified what level of risk you are willing to retain by not actioning certain cases?
40. Do you have alternative risk treatment strategies for some cases? For example, a lower intensity compliance activity?
41. To what extent are you willing or able to call on additional resources?
42. Have relevant stakeholders agreed to make those resources available to you?
Page | 200