Charities Clamoring for Tax Office Endorsement

Australia’s tax office has received an average of more than five applications every day from charities wanting to be allowed to receive tax deductible gifts.

A spokesperson for the Australian Taxation Office (ATO) told Pro Bono Australia News that over the last year it had received more than 2,000 applications for Deductible Gift Recipient (DGR) status.

The figures come the same day the Australian Charities and Not-for-profits Commission (ACNC) revealed that more than 10,000 charities could face penalties or lose their status for failing to submit their 2015 Annual Information Statements (AIS) by the 31 January deadline.

The ATO spokesperson said it was currently assessing 42 applications for DGR status, a process which it admitted could be “confusing and frustrating” for many charities.

Many charities that are registered with the ACNC have been denied endorsement by the ATO.

But the spokesperson denied that charities had often been forced to wait lengthy periods to find out if they had received their DGR status, claiming that it’s current average processing time was approximately just 13 days.

“We are committed to providing a timely and high quality service to the sector. Currently 97 per cent of all DGR applications are processed by the ATO within the service commitment of 28 days of receiving all required information,” the spokesperson said.

“Some DGR categories require approval from another government department before it can obtain DGR endorsement, for example the cultural gifts program, Register of Environmental Organisations, Register of Harm Prevention Charities, and Overseas Aid Gift Deductibility Scheme.

“This process generally requires ministerial approval and can therefore be delayed depending on priorities. Once the organisation is approved the DGR application form is then sent to the ATO to finalise the endorsement process.

“We acknowledge that the legal requirements for some DGR categories and the two step process for DGR endorsement may be confusing and frustrating for those wanting to apply for DGR status.

“We are committed to making the DGR application process as easy as possible and have already implemented some streamlined processes in our partnership with the ACNC.”

The ATO said its decisions on which charities received DGR status was dictated by Australian law.

“Under the current law, not all charities are eligible to be DGRs. We review each application to determine if the charity meets the requirements under the law to receive DGR status,” the spokesperson said.

“For a charity to be eligible for endorsement as a DGR it must fall within a category of DGR described in the DGR table in the tax law. We will approve DGR endorsement where an applicant meets the eligibility criteria.

“In some instances the processing of a DGR application may be delayed because we are waiting on the applicant to provide supporting information to enable us to make a decision.

“We would encourage any applicant in this situation to provide the requested information to their case officer as soon as they can, or to make contact with them if they are having difficulties in providing the requested information.”

The figures come as the ACNC revealed that only 66 per cent of charities submitted their AIS on time.

ACNC Commissioner Susan Pascoe AM told Pro Bono Australia News she was happy with the result, which was an improvement on the previous year.

Approximately 30,000 charities were required to submit an AIS by the end of last month, almost 20,000 charities had done so. This was 2,600 more than the same time last year.

“We are pleased to see such a large number of charities submit their 2015 Annual Information Statement on time,” Pascoe said.

“The submission rate is an improvement on the same time last year. This indicates that most charities are familiar with their reporting obligations to the ACNC, and are keen to demonstrate compliance and transparency to the Australian public.”

Pascoe said it was important for charities to report to the ACNC on time.

“The Australian public expects charities to be well-run and transparent, and timely submission of an AIS is the best way that a charity can display these characteristics,” she said.

“However, some charities run the risk of penalties by not submitting on time. I urge charities that missed the 31 January due date to get online and complete their 2015 AIS immediately to avoid the risk of penalties or loss of registration.”