Tax agents: beware of “administrative overpayments” added to your RBA

The Commissioner has recently debited tax agents' running balance accounts (RBAs) with tax refund payments received by agents on behalf of their clients. It is alleged that the refunds can be recovered as amounts that the Commissioner "paid to a person by mistake" pursuant to s 8AAZN of the Taxation Administration Act 1953 (Cth). The practice is insupportable. First, the wrong RBA is debited. The client, not the tax agent, is the "person" to whom tax refunds are paid. Second, the Commissioner rarely makes mistakes when paying tax refunds. Refunds are paid automatically and entitlement derives from self-assessment. Australia's only two s 8AAZN authorities have upheld these propositions.