The tax office needs to ramp up efforts to avoid problems blamed for the "robo-debt" saga when collecting debt after tax time, the agency has been told.
Fears about automated data-matching and debt collection have prompted a parliamentary standing committee to tell the Australian Taxation Office to spend more on examining cases of suspected debt before sending letters to taxpayers.
"Given concerns about this process, in which the onus of proof is on the taxpayer, the committee sees room for greater scrutiny of automated data matching and related tax debt audit processes," the inquiry into the ATO's last annual report found.
The tax office expects to contact more than 300,000 people when detecting 'once only' discrepancies in tax returns this year.
It sends letters when these are greater than $200, giving an option for an automatic amendment, and people disputing the assessments have to contact the ATO before the due date to give evidence.
The committee's report urged the tax office to look at spending more on customer service to deal with taxpayers calling to dispute debt letters, as new figures show that during the "robo-debt" controversy the average waiting time across Centrelink's "main business" phone lines was nearly 27 minutes in January.
"The ATO may also consider whether requirements for the taxpayer to provide very old information at short notice, requires a review of the automatic deduction of debts and a corresponding need for greater investment in telephone support for quick resolution in case of error," it said.
Critics of the Department of Human Services' "robo-debt" program say its problems have been caused by job cuts, the removal of staff from scrutinising suspected debt cases, and the onus of proof to dispute debts put on clients.
The tax office told the inquiry that while the majority of taxpayers tried to complete their tax returns accurately, errors were made because some lodged before all pre-fill data was available.
"Generally no penalties are applied to cases where taxpayers have lodged their return but are later found to have a discrepant amount," it said.
The ATO penalises taxpayers who repeatedly leave income undeclared, or when people fail to lodge a tax return despite third party data indicating they should have lodged.
It said it could not comment on the committee findings before government responses to the report were tabled in spring.
The report called for the tax office to give a clearer picture of which services its staff were deployed to and the training they received given staffing cuts of 17 per cent in three years, and the potential for errors in digital processing.
It also asked for figures showing how much the ATO relied on contract staff and volunteers, and how it had outsourced any work.
The ATO should keep educating taxpayers about its digital program, particularly vulnerable people "more likely to attract compliance action if they fail to meet their obligations", the report said.
Centrelink is embroiled in controversy over its "robo-debt" program as recent figures show a quarter of Canberra welfare recipients caught up in the saga owed no money or had their debt reduced after receiving letters from the Department of Human Services.
Clients trying to get through to the welfare agency's telephone lines hit engaged signals 28 million times in just seven months, figures released in March showed.