ATO $450m IT upgrade disrupts tax refunds

This story has been corrected to reflect that the ATO planned just one period of disruption, not two.

The Australian Tax Office is warning of lengthy disruptions to its Tax Agent and Business Portal during Easter 2008 as it deploys the first phase of its AU$450 million, three-year long Change Program.

Outgoing Second Commissioner of the ATO, Greg Farr, warned small business owners and tax agents last September to expect disruptions to its Web portal while it deploys the first of its "three phase" rollout of its Change Program.

The ATO plans to deploy its integrated core processing (ICP) system, used to process income tax, fringe benefits tax and HELP (Higher Education Loan Payments) in March in phase one, known as Release 3.1.

"A new, easier to understand notice of assessment will be issued to taxpayers. A new statement of account for income tax will also be available that uses a more conventional format and includes assessment, penalty and interest information in a single statement," the ATO said on its Web site.

However before the system is deployed, thousands of businesses' tax refunds may be delayed due to scheduled disruptions to ATO services. The ATO had originally planned for an 11 day period of disruptions to occur between 22 December 2007 to 2 January 2008, however it then shifted the dates to March 2008 over a period of 26 days.

The disruption to services is planned between 6 to 31 March 2008, affecting the lodgement of quarterly Business Activity Statements (BAS). Although the ATO will still accept lodgements, processing will cease during the period.

Acute disruptions to all ATO refunds are expected between 14 to 30 March as a result of the system change. By 2pm on 20 March, the ATO's systems will be completely unavailable, and its portals will be unable to process transactions such as BAS lodgements, refunds or changes of address.

The ATO expects its systems and portals to be fully operational by 31 March 2008.

Release 3.2 is expected to commence during July 2008, which will incorporate its superannuation systems into the integrated core processing system.

The system will then be expanded in January 2009 to include processing of all BAS tax details -- including GST, income tax installments, withholding, luxury car tax, and excise -- and will be integrated into a single account for tax agents and businesses.

In April this year, ZDNet Australia reported that the Siebel-based case management system that was implemented by Accenture had crashed, forcing the ATO to temporarily reduce the number of users on the system from 4,000 to 1,500.

The crash occurred during the Easter break this year -- the same period in which it intends to shut services down in 2008.

Outgoing second commissioner Greg Farr has overseen the project since 2005, however, Farr has since taken up a new role as chief information officer of the Department of Defence.

The ATO has yet to find a permanent replacement for Farr. In the meantime, the ATO Change Program will be overseen by its current CIO Bill Gibson.