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  • Independent review of the Statement of Audit Position for groups with a turnover greater than $250m

    Independent review – the fundamentals

    Tax law administration and large business are both challenging environments. As we apply tax law to complex facts, some areas of disagreement may be inevitable. We want to resolve areas of disagreement with you as early and cooperatively as possible.

    To support this, we have established an independent review service, where an independent technical officer outside the audit area reviews the technical merits of your case prior to finalisation of the ATO audit position. The independent review is conducted by a senior officer from our Objections and Review business line, which forms part of the Law Design and Practice Group. This officer will not have been previously involved in the audit and will bring an independent 'fresh set of eyes' to the review.

    The position paper process

    As part of developing an ATO position, you are given the opportunity to respond to the audit team’s position as disclosed in the Audit Position Paper.

    Areas of disagreement are considered by the audit team when reaching their Statement of Audit Position which is then communicated to you.

    If you disagree with some or all of the Statement of Audit Position you may request an independent review.

    How it will work

    Requesting an independent review

    You can request an independent review if your turnover or income is greater than $250 million and you have received a Statement of Audit Position regarding your income tax, excise, goods and services tax, or other forms of tax.

    In an appropriate case, the ATO may agree to a request for an independent review at an earlier stage on a discrete issue. An earlier-stage review might be appropriate if the audit team has finalised its position in writing on a threshold issue. If you think this may be an option in your case, you should discuss with the audit team.

    How long do you have to request an independent review?

    You have 10 working days from when you receive our Statement of Audit Position to request an independent review unless a longer period is agreed.

    If you want to discuss the independent review process or criteria prior to seeking a review, please contact the audit team who will arrange for a discussion with the independent review area.

    How to request an independent review

    Your request for an independent review may be emailed to us at There is no required form but your request must clearly specify and outline each area of disagreement with the Statement of Audit Position. The audit team will be advised of your request.

    How long does the independent review take?

    An independent review is normally completed within 60 working days from your request for review. We will advise you of any change to this timeframe.

    When is independent review not available?

    There will be no opportunity for an independent review of a Statement of Audit Position where:

    • the request for independent review is received more than 10 days (or the otherwise agreed period) after the issue of the Statement of Audit Position
    • the 60 working days allowed for independent review causes the audit end date to be projected beyond the period of review and you do not agree to extend the relevant period of review to accommodate the independent review and the post-review process
    • the specific areas of disagreement have or will be considered by or subject to recommendations of the General Anti-Avoidance Rules Panel
    • the specific areas of disagreement were already subject to an independent evaluative resolution process; for example, early neutral evaluation or case appraisal
    • you have had substantially the same issues considered in another independent review or an objection (this does not exclude independent review where there are material differences in the facts or law).

    An independent review is offered at the ATO’s discretion, and in exceptional cases the ATO may choose not to offer an independent review. Decisions not to offer independent review will be made sparingly. A decision not to offer independent review will be made by the Deputy Commissioner, Objections and Review. Examples of where the ATO may consider not offering an independent review include:

    • where the ATO has publicly flagged that tackling the main issues in dispute is among its highest priorities (this might be the case where a Taxpayer Alert is clearly on point)
    • where you have not cooperated effectively with the audit, for example you have failed to provide material information that the audit team requested
    • where the case has already been subject to in-depth scrutiny and review independently from the audit team by the most senior ATO officers (for example, at the Deputy Commissioner level or higher).

    If a request for independent review is declined, you will be notified of the reasons why. The audit team will then finalise the issue in accordance with the Statement of Audit Position.

    There are some limitations on what will be considered in independent review.

    • Independent review will not generally consider new facts, evidence or arguments that are material and have not been raised during the audit. If new material facts, evidence or arguments are introduced, the independent review may be discontinued. However, independent review may agree to consider facts or arguments that merely clarify or reinforce points made in the audit, or may agree to consider facts or arguments if other special circumstances justify doing so, such as a recent development in the case. For example, where the Statement of Audit position contains new arguments or information the reviewer will adopt appropriate measures to ensure you are afforded a fair opportunity to respond. In deciding how to handle new facts, evidence or arguments, we will consider what is fair to both you and the audit team. We will also consider the risk of delaying or complicating the independent review process.
    • Independent review will not decide between matters of conflicting expert opinion. Such matters can be considered if the case proceeds to objection. You may also wish to talk to the audit team about whether an alternative dispute resolution (ADR) process would assist in resolving such issues. If so, it may be preferable for this to occur prior to the Statement of Audit Position. This limitation does not prevent the independent reviewer considering whether the expert evidence the parties' have relied on is relevant to resolving the issue in dispute, or making observations about any gaps in the evidence.
    • Independent review will not usually consider the application of shortfall penalties, as these are not covered by the Statement of Audit Position.
    • Independent review will not review complaints about the process or procedure that do not affect who has the better view of the ultimate tax issue.

    The independent review process

    The outcome of an independent review process is in the form of recommendations on what the reviewer considers is the better view of the facts and the application of the law to those facts.

    The independent review:

    • is conducted by a senior officer from our Ojections and Review business line
    • results in a recommendation made to you and the audit team by the independent reviewer
    • will involve a 'case conference' (discussed further below)
    • will focus on, but is not limited by, the areas of disagreement identified in the request for an independent review.

    Once the independent review is finalised, the audit team will complete the audit in line with the recommendations of the independent review.

    After the independent review is finalised, we will seek feedback from you to identify any improvements we can make to the process.

    Working together during the independent review process

    The independent review brings all parties together to discuss and resolve factual and technical disagreements. During the independent review process all parties must agree to:

    • participate in a case conference with the independent reviewer; this helps the independent reviewer fully understand the facts and technical issues, and provides an opportunity for the reviewer to ask questions in order to clarify issues
    • have ongoing, open and frank discussions
    • meet timeframes as set out in the independent review case plan
    • consent to extend the amendment period, if needed.

    You can expect to receive regular progress updates during the independent review process. You will also receive written recommendations on the outcome of the independent review.

    Maintaining the independence of the independent review process

    We are committed to ensuring the actual and the apparent independence of our processes. We ask that participants refrain from contacting the independent reviewer to discuss the merits of their technical position – these discussions should be reserved for the case conference. We also ask you not to attempt to introduce new material during any phase of the independent review process. The same protocols apply to us.

    The independent reviewer will obtain the documents relevant to the Statement of Audit Position from the audit team and will not consider any document that has not been provided to you (except if we are legally unable to provide the document to you, in which case we will discuss with you how to proceed).

    If the independent reviewer requires further information from either party both parties will be advised and where relevant, will have an opportunity to comment.

    What is the purpose of the case conference, and how will it be conducted?

    A case conference is an informal meeting attended by you and the audit team. It is a critical aspect of the independent review process. It provides for you and the audit team involved in the case to meet collectively with the independent reviewer to discuss and clarify the issues for the benefit of the review.

    What is the purpose of the case conference?

    The case conference is an opportunity for the independent reviewer to discuss the issues with you and the audit team. It allows the independent reviewer to:

    • confirm the agreed facts
    • determine and, if possible, narrow down the specific areas of disagreement
    • ask questions to clarify issues giving rise to disagreement.

    Who should attend the case conference?

    As the case conference will only consider facts, arguments, information and evidence previously provided to the audit team, it is important that people attending have a thorough knowledge of the facts and understanding of the issues.

    For that reason, only your representatives or advisors who have been directly involved in the conduct of the audit should attend the conference. Likewise for the audit team, only those officers who have been directly involved in the audit may attend. An exception may be made if there has been a recent change in advisors or audit officers.

    In keeping with the informal nature of the case conference, external legal counsel, senior representatives or advisors who cannot demonstrate a significant role during the audit developing the response are not usually permitted to attend.

    As the case conference is primarily for the benefit of the independent reviewer, he or she will ultimately determine who may attend the case conference. Decisions on attendance will be made on the basis of ensuring fairness to the parties and to achieving the best possible outcomes from the case conference.

    When does the conference occur?

    Generally the case conference will occur within three to four weeks of your application for an independent review being accepted.

    Once an independent reviewer is allocated to the case you can expect them to contact you to introduce themselves and discuss the independent review process. At this time they may also discuss potential times, dates and locations for the case conference.

    How will the case conference be conducted?

    While each conference will be tailored to individual circumstances, there will be similarities in the process.

    There will normally only be one case conference during an independent review.

    Approximately one week before the case conference you can expect to receive an agenda for the conference. The agenda will identify any issues that the reviewer would like to specifically discuss or clarify during the conference.

    The case conference will normally take between three and four hours, depending on the issues at stake. As the conversation is intended to be informal, it may not necessarily sequentially follow the structure of the agenda. However, you can expect that all of the topics identified in the agenda will be covered, and there will be opportunity for you to raise any issues not listed, provided you do not introduce new information, arguments or facts.

    The independent reviewer will facilitate the case conference, engaging with you and the audit team to clarify issues and areas of disagreement you have raised, including the relevance or otherwise of any factual and technical conclusions which have been drawn. The parties are not prohibited from directing conversation and questions to one another provided the independent reviewer is allowed to remain in control of the discussion.

    The independent reviewer will not provide any observations, recommendations or preliminary conclusions during the case conference. No minutes will be taken or supplied. However, you may take notes in the conference for your own purposes.

    The focus of the case conference is to discuss and clarify matters raised at audit for the benefit of the independent reviewer. It is not an ADR forum nor is it a forum to consider whether ADR is appropriate or available. It is always open to you and the audit team to discuss potential dispute resolution approaches and the independent review process is not intended to limit opportunities for this to occur.

    What can you expect following the case conference?

    Following the case conference the independent reviewer will undertake their post-conference analysis of the outstanding matters in contention.

    If any further facts or information needs to be clarified, the independent reviewer may contact the parties individually. If one is contacted to seek clarification of facts or information, the other will be advised and will have an opportunity to comment.

      Last modified: 17 Mar 2022QC 26636