Dear Australian Taxation Office,

Could you please provide me with any documents that you hold that:

1. explain why gross income (rather than income net of deductible expenses) is used when calculating PAYG instalments - see https://www.ato.gov.au/businesses-and-or...

2. explain why this doesn't lead to the ATO collecting more tax during the year that then needs to be refunded once the taxpayer completes their tax return (which will be based on income net of deductible expenses).

Thanks for your help.

Yours faithfully,

Paul Swain

Dear Australian Taxation Office,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of Australian Taxation Office's handling of my FOI request 'Income calculation for PAYG instalments'. You can find your response at https://iorder.com.au/publication/Downlo...

My reasons for requesting a review are:

1. The decision maker has decided that I was requesting *information* and not *documents* - see the second paragraph of the _Decision_ section. The reasons for this were not stated.

I do not believe that this is correct. I *am* interested in the documents that I specified for the reasons that I will set out below.

2. The relevant legislation appears to be the definition of instalment income set out in section 45-120 of the Taxation Administration Act 1953 - see https://www.legislation.gov.au/C1953A000...

My lay reading of this is that the instalment income is based on the taxpayer's assessable income. Assessable income takes into account both income and deductions.

This appears to be confirmed by the decision maker, who says in the _Additional information_ section of the response to my request:

"Therefore, implicit in that calculation of the instalment income is the deductions that the taxpayer claimed against their assessable income in the most recent tax return they lodged."

and https://www.ato.gov.au/law/view/document... which the ATO provided to me in response to a request for the legislative basis for the instalment system.

3. This is not my experience. In the ATO's letter informing me that I am now in the PAYG instalments system, the instalment income was based purely on the income in my last tax return, without any allowance for the deductions that I claimed (and that were accepted by the ATO). The instalment income is therefore significantly higher than the relevant assessable income in my last tax return.

4. When I called the ATO on 9 January 2024 to ask about this, the person with whom I spoke agreed that the instalment income set out in my letter was based purely on the income included in my return and that there was no allowance for the significant deductions. They were unable to explain this approach.

5. So I am left with the situation where:

- the decision maker in this case appears to believe that instalment income allows for deductions (and that presumably this has influenced her decision to refuse my request). The reasons for this belief were not stated;
- this belief is not supported by the evidence that I have; and
- the ATO's customer service agrees with me that the instalment income in the ATO's letter does not allow for the deductions I made and is unable to explain this.

6. It therefore looks like something is going on, and that is why I have requested the *documents* that I specified in my request and not *information* as the decision maker has decided.
 
 
Could you therefore please review the original decision and provide me with the *documents* that I have requested. At a bare minimum there must be some documentation of the approach that was used to calculate the instalment income that is stated in the letter the ATO sent me, even if there are no other documents, e.g. training material that the ATO's customer service staff could have used to explain the approach when they are asked to explain it by a taxpayer, and which would have meant that I didn't have to go through this laborious battle of explaining to the ATO's lawyers what the ATO is actually doing.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.righttoknow.org.au/request/i...

Yours faithfully,

Paul Swain

Dear FOI team, Australian Tax Office,

I believe that your response to my request for an internal review made on 9 February 2924 (your ref: 1-10RB1BY5) was due by today.

I have not received a response or, as you undertook to do, any contact to discuss a delay because the request is "complex".

Could you please respond immediately, or explain why your response has been delayed and request an extension of time.

Yours sincerely,

Paul Swain