Code of settlement practice

Overview of the Code

8. The Code is intended to provide guidance on the following principal matters:

• what constitutes a settlement, including special considerations that apply to borderline questions of fact and law, and disputes as to quantum (paragraphs 10 to 16)
• the legal basis for making settlements in taxation disputes, and the scope of the good management rule (paragraphs 17 to 21)
• whether a settlement is appropriate in view of factors such as
• whether there is an actual or pending precedential ATO view
• the likelihood of inconsistent treatment
• the likelihood or desirability of litigation
• the possible effect on compliance
• the ability of the taxpayer to pay
• the availability of alternative methods of dispute resolution
• any other special circumstances
• additional considerations that apply to global settlements (paragraphs 25 to 36)
• the relationship between settlement procedures and actual or potential prosecution action, and the procedures that must be followed in such cases, including notification requirements (paragraphs 38 to 47)
• the appropriate treatment of penalties and interest charges in cases involving settlements (paragraphs 48 to 52)
• the procedures that should be followed in negotiations for a settlement, including approval of decision makers, establishment of the precedential ATO view, obtaining advice from counsel, the conduct of proceedings, documentation requirements and the avoidance of conflicts of interest (paragraphs 53 to 66)
• the procedures that should be followed in making and documenting a settlement agreement and determining its scope, including ensuring that it complies with the Code and is fully documented and recorded on the ATO Siebel case management system (paragraphs 67 to 69).

Sections within Part 1: Purpose and scope of this Code

• Ensuring accountability and transparency
• Overview of the Code
• Date of effect