• 3. Tribunal litigation

    At a glance

    Most taxpayers seeking independent review of ATO decisions choose a tribunal (86% in 2011-12, up from 80% in 2010-11). About 81% of tax and superannuation litigation cases in progress at the end of 2011-12 were tribunal cases7. This is not surprising, because tribunal review is intended to be a low cost and less formal review process; it can also be confidential.

    The number of tribunal cases declined steadily between 2007-08 and 2009-10 as mass-marketed scheme-related cases were finalised. They increased in 2010-11 and in 2011-12, in part reflecting increased ATO compliance activity (data matching, cash economy benchmarking, and refund integrity) as well as excess contributions. See figure 3.3 for the increase in superannuation applications 2011-12.

    Most taxpayer applications are resolved well before litigation. The number of cases conceded by the ATO is consistent over the five-year period. See figure 2.1. The main reason the ATO concedes is as a result of the taxpayer providing additional information. This suggests that further improvement in communication between the ATO and taxpayers at earlier stages in the dispute process will promote earlier resolution of disputes without the need to proceed to litigation.

    Cases conceded by the taxpayer increased in 2011-12 to similar levels as 2009-10. See figure 2.1.

    In 2011-12, about 15% of taxpayer applications resulted in a tribunal decision, and most of these decisions were fully favourable to the ATO (75%). See figure 3.2.

    Most taxpayer applications to a tribunal concern their income tax assessments (62% in 2011-12). See figure 3.3.

    Other applications to a tribunal in 2011-12 involved:

    • goods and services tax (19%)
    • superannuation (18%)
    • excise (1%).

    In 2011-12, by market segment, the majority of applications to the AAT were from the individuals (52%) and micro enterprises market segments (34%), only 1% of applications were from the large market. See figure 3.4. This trend has been consistent over the past four years.

    Trends 1 July 2007 to 30 June 2012

    Figure 3.1 Summary of trends

    Figure 3.1 Summary of trends

    Figure 3.2 Decision results

    Figure 3.2 Decision results

    Figure 3.3 Cases lodged by revenue product

    Figure 3.3 Cases lodged by revenue product

    Figure 3.4 Cases lodged by market segment

    Figure 3.4 Cases lodged by market segment

      Last modified: 15 Feb 2013QC 26462