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  • Recommendation 4.2

    The IGTO recommends that:

    As soon as practicable, the ATO should consider and identify whether a case has wider ramifications and involves a public benefit that may be better served by having the courts decide the case. If the case is so identified, the ATO should:

    1. communicate this to the taxpayer and their representatives
    2. provide litigation funding irrespective of the taxpayer’s resources
    3. engage with the taxpayer and their representatives to:  
      1. reach agreement on those materials facts to which the parties can agree
      2. identify any material facts which are in contention and determine whether additional information may assist in resolving these matters
      3. settle the questions which need to be put to the Court at the hearing; and
      4. clarify and settle any necessary interlocutory or procedural steps to expedite the matter for hearing.

    The ATO publish a public register of cases in litigation, sufficiently redacted to remove identifying taxpayer information, which have wider ramifications and involves a public benefit. The register should be updated in a timely manner to reflect progress of the litigation and include the following information:

    1. the point of law to be clarified
    2. the benefit expected from the clarification of the law and the wider ramifications which may arise if there is no clarification
    3. why the particular case is appropriate to clarify the point of law; and
    4. what action the ATO is taking to mitigate the impact on other taxpayers while the case is being heard and determined, including consideration of suspension or stay of disputes which are materially similar in fact or questions of law and remission, or cessation of GIC accrual, for the period of the suspension in these cases.

    ATO response

    We agreed in part with this recommendation. Implementation was completed on 20 August 2013.

    We implemented a new process to consider and identify whether cases have wider ramifications and could potentially meet the test case funding criteria. The Deputy Chair of the Test Case Litigation Panel reviews new, significant matters for potential test cases. As part of this review process, we send information about the test case funding program and the application process to the taxpayer if their matter is identified to have potential to be a test case. It is emphasised that there is no guarantee that their case will be approved for funding. If the taxpayer makes an application for funding, the application will be referred to the Test Case Litigation Panel for consideration in the usual manner, with all taxpayer- initiated applications.

    In addition, the Test Case Litigation Unit identifies potential test cases through the use of internal forums that raise significant issues that need to be tested by the courts.

    Training is now available to all staff on how to identify strategic cases and potential test cases, and how to appropriately refer those matters.

    We have launched the Test Case Litigation Register on The register is published quarterly and provides the information mentioned in the IGTO’s recommendation. Any identifying taxpayer information is removed where appropriate.

      Last modified: 25 Oct 2019QC 40262