Code of settlement practice

When settlement discussions may occur

22. Issues between the Commissioner and taxpayers can generally be discussed and resolved in accordance with the law at any stage. Settlement discussions should not circumvent any appropriate escalation of the issue to a senior officer.
23. By way of example, settlement discussions can occur where taxpayers make settlement overtures prior to formal assessments being raised. This often happens during an audit, usually following a taxpayer's consideration of a position paper from the ATO or other ATO communication of its thinking.
24. Where settlement is sensible and appropriate in relation to a matter, it would make little sense to go through a formal process of assessment, objection and amendment in order to reflect the agreed outcome.

Sections within Part 2: Factors affecting settlement

• Meaning of settlement
• Disputes as to quantum
• Borderline questions of law and fact
• Legal basis for settlement
• The good management rule
• When settlement discussions may occur
• Circumstances where it would be generally inappropriate to settle
• Circumstances where it may be appropriate to settle
• Where unrelated issues are involved: global settlements
• Relevance of ability to pay
• Alternative dispute resolution, including mediation
• Settlements and prosecutions
• Treatment of penalties and interest charges