Your client can apply for funding under the program for:
- a case which has started or is about to start
- in-principle approval to develop a case
- in-principle approval for an issue or case.
In-principle approval to develop a case
Sometimes more work is needed on a case before it can be litigated to test an important issue of law.
There are two types of in-principle funding to develop a case:
- We may agree to provide funding for the costs (including non-legal costs) of developing the case, such as preparing an objection or private ruling request - funding for these costs is usually capped.
- If we identify a case that has the potential to test an important issue, but the matter is not yet in litigation or is still before the AAT with questions of fact to be resolved, we may agree to offer in-principle funding for future litigation costs, if the matter proceeds to litigation or to a higher jurisdiction.
If we give in-principle approval to fund a particular appeal your client may litigate in the future, we will advise you in writing. The approval may be given on the basis that funding automatically starts on the date a particular appeal is lodged or it may be given on the condition you submit a further application for funding on behalf of your client to confirm their case still meets the funding criteria.
If your client seeks in-principle funding to develop a case for litigation, they need to apply for funding before they incur the expenses and make it clear in their application what they are seeking funding for, being the litigation or pre-litigation costs or both. Your client's application needs to include details of how the case will be developed so that it can be brought before a court or the AAT.
If your client seeks funding to prepare an objection or a private ruling request, their application will need to:
- show there are special circumstances to justify funding - for example, if clarification of the issue would be of significant benefit to the community but the cost to an individual of running a case would be disproportionate to the amount of tax in dispute
- provide details of a proposed work plan and budget for developing the case before we give in-principle approval
- describe each item of work, the person who will perform the work and their qualifications, and the proposed timeframe for completing the work
- provide a budget with the number of hours or days expected to be spent on each item in the work plan and the hourly and daily rates to be charged.
A funding contact officer will discuss the funding options with you if we grant this kind of approval.
In-principle approval for an issue
Although applications for in-principle approval for an issue sometimes come directly from taxpayers, they would usually be made by an association on behalf of its members. If an association has a tax issue of importance to its members, the association may seek in-principle approval for the issue to be funded. The association may do this before it incurs the expense of finding a case that will test the issue.
As the panel will not have an actual case to consider, it is particularly important to explain the legal principles that will be tested.
If we accept an issue for resolution under the program, we may identify a suitable existing case or identify a case jointly with the association. They will then need to send us an application for test case funding. If we give in-principle approval for the issue, we will advise the association in writing and allocate a funding contact officer to help them with their case and funding options.
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An approval in-principle does not automatically entitle your client to a reimbursement of costs. We will only reimburse costs if this has been agreed to in a formal written agreement - for example, in an executed test case funding deed.
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We usually send a letter of offer and draft test case funding deed to the taxpayer or their legal representative whose case is being used to test the issue.
Sections within Applications we receive
Last Modified: Friday, 10 May 2013