The Australian Taxation Office’s troubled “robotax” campaign recorded multiple bugs in its systems affecting hundreds of accounts in the lead-up to its planned expansion of the program, according to new documents.
Internal ATO reports and correspondence obtained under freedom of information laws by iTnews show that more than 600 accounts were affected by failings in the agency’s automated systems, which included instances of “false debts” wrongly extracted from taxpayers.
The disclosures show the problems with the rollout of the program were bigger than previously known, building on a February report by Guardian Australia that identified an ATO systems error that resulted in miscalculations.
The tax campaign was originally designed to raise as much as $15.2bn by pursuing an assortment of debts, many of which were inadvertently accrued decades ago and had been hidden from taxpayers until recently.
The old debts are almost impossible to verify and far exceed the five-year retention period most taxpayers are required to keep records.
After widespread criticism of the initiative, including from the tax ombudsman, the federal government has moved to amend laws that will allow the ATO to keep debts put on hold before 2017 on ice indefinitely, rather than extract them from future tax refunds, as was planned.
The ATO describes the debts as “on hold”, because they are scraped from tax refunds as opposed to payment being immediately demanded.
An ATO spokesperson said in a statement most of the systems issues related to debts on hold being re-raised for more than the available credit, which was not the intention.
“We took swift action to address this error, including placing the additional amounts back on hold as appropriate,” the spokesperson said.
Regarding the false debts, the ATO representative said accounts were remediated for a small number of taxpayers who had a debt re-raised that was greater than the original amount owed.
The ATO spokesperson said that the agency can assure taxpayers that the on-hold debts are now all verified.
The FoI documents show that, as at early October last year, 20 taxpayers were charged false debts, while a further 60 were subject to a similar issue of having amounts re-raised in excess of the original debt.
As the campaign to extract historical debts unwinds, attention has turned to those who felt pressured by the tax office to pay the amounts after receiving correspondence last year for which the ATO later apologised.
The boilerplate communication provided details on how to pay the outstanding amounts despite not containing any information about when or how the debts were accrued.
Government representatives have argued that they were legitimate debts and therefore would not be refunded to those who paid.
The Greens senator Nick McKim said the pursuit of the historical debts should have been immediately halted once a single false debt was raised.
“All debts recovered under this program should be refunded in full,” he said.
Recipients of the ATO letters have dubbed the program “robotax” due to the robotic and unsympathetic nature of the initiative that reminded Australians of the ill-fated robodebt scheme, with taxpayers required to prove authorities wrong or pay up.
The new documents show that the tax office was trying to resolve the issue of false debts shortly before the mass letter mail-out late last year that signalled a major ramp-up of the program.
“This bug appears to occur randomly (we have not yet identified the root cause or bug traits),” an ATO document dated 1 August 2023 said.
“The system correctly re-raises the amount for one period, then incorrectly applies the same dollar value to another period despite the dollar value that was originally non-pursued for that period.”