Christopher Knaus 

ATO issues false, years-old tax debts worth thousands of dollars due to IT error

Exclusive: Debt letters demand payment within two weeks, with some dating back five years
  
  

ATO sign
False, years-old debts worth thousands of dollars have been received by taxpayers as the Australian Tax Office grapples with a new system that is sending out erroneous letters. Photograph: April Fonti/AAP

Taxpayers are being asked to pay false, years-old debts worth thousands of dollars due to system problems at the Australian Taxation Office.

Guardian Australia received reports this week that taxpayers had received erroneous debt letters headed “You have an overdue tax debt”, warning they owed unpaid general interest charges.

The letters asked Australians to pay hefty debts within two weeks. In some cases, the debts dated back five years.

When taxpayers called to query the debt, ATO staff told them not to pay it and to ignore future automated letters and calls asking for repayments.

The ATO told the Guardian the debts were being issued due to a problem with a new system it uses to process activity statements. The problem emerged in January, a spokeswoman said, and caused general interest charges to be incorrectly applied to the accounts of taxpayers.

“We are resolving this as a priority and are in the process of remediating the affected clients’ accounts,” the spokeswoman said. “The ATO will work with affected clients as appropriate and will ensure that no collection action will be taken on these accounts.”

The ATO apologised for the inconvenience or concern, but said that no action was required from taxpayers or their representatives. The remediation would ensure taxpayers were not asked to pay erroneous debts.

It is currently unclear how many people the problem is affecting, or the total amount wrongly raised in debts.

In one case, the Guardian understands a taxpayer was asked to pay more than $1,000.

The ATO has struggled with technical problems in recent years. In 2016, a technical glitch put large amounts of data at risk and caused critical services to go offline at a crucial time in the financial year.

The problem was caused by the ATO’s 12-month old Hewlett Packard Enterprise hardware storage system and its primary backup, which are believed to have failed.

The agency’s website went down and the various online services, including the agent portal, were inaccessible.

Last year, the ATO experienced problems with its portals and online services through the MyGov website, which took them down at a critical period in July.

 

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