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  • Recommendation 4.1

    The IGTO recommends that the ATO adopt the principles espoused by the AAT and NADRAC, that all disputes are suitable for ADR (including direct negotiation) except where it would be clearly inappropriate. For example, where:

    • the cost and delay involved in ADR is disproportionate to the benefits to be derived, such as where the parties are in agreement as to the facts and the dispute turns on genuine and fundamental issues of law
    • there is a clearly identified public benefit in having the matter judicially determined; or
    • there is a genuinely held concern that it is not appropriate to engage in dispute resolution, such as in cases of serious criminal fraud or evasion.

    The IGTO further recommends that the implementation of this principle should be the subject of consultation with stakeholders as part of Recommendation 5.1.

    ATO response

    We agreed with this recommendation and implementation was completed on 19 November 2013.

    After consulting with the National Tax Liaison Group sub-committee on 4 March 2013, we issued Practice Statement PS LA 2013/3 - Alternative Dispute Resolution (ADR) in ATO Disputes to replace PS LA 2007/23 (withdrawn effective 31 July 2013).

    Paragraph 5 of the practice statement confirms our commitment to resolving disputes by early engagement with taxpayers and the use of ADR. Paragraphs 7 and 8 set out examples of the kinds of situations where ADR may be appropriate to resolve disputes when early engagement and direct negotiation have failed. Paragraph 9 provides some examples of situations where we consider ADR may be inappropriate, including when:

    • the cost and delay involved in ADR is disproportionate to the likely benefit
    • the dispute turns on genuine and fundamental issues of law or is otherwise straightforward and there is a clearly identified public benefit in having the matter judicially determined
    • there is a genuinely held concern that the case involves serious criminal fraud or evasion.
      Last modified: 25 Oct 2019QC 40262