You are likely to conduct your business activities in a complex commercial and legislative environment. Sometimes disputes occur when tax law is applied to complex facts.
We want to resolve issues directly with you as early and cooperatively as possible, so that we arrive at sensible positions and it is less likely that disputes will arise. Ideally, these discussions should begin when the issue is first identified, such as in a compliance review, audit or private ruling.
When disputes do occur, we want to resolve them early to avoid litigation where possible. We have a range of dispute resolution strategies available to resolve issues as early as possible.
On this page:
Direct contact and negotiation
Our preferred method to resolve disagreements is through direct contact between us and taxpayers. The overwhelming majority of disputes are resolved this way.
If you are concerned about how a compliance activity is going, we encourage you to discuss the issue with your nominated ATO case officer.
Alternative dispute resolution
Although we always attempt to resolve disputes directly with you and your representatives in the first instance, we will consider whether an alternative dispute resolution (ADR) process may assist.
ADR is a cost-effective, informal and quick way to resolve disputes. It uses an independent third party to assist in resolving the dispute. In cases not resolved prior to an Administrative Appeals Tribunal or court hearing, ADR can also be useful in narrowing the issues in dispute.
ADR may not be appropriate if, for example:
- it would be in the public interest to have judicial clarification of the issues in dispute, and the dispute is a suitable vehicle to test the issues
- resolution can only be achieved by departure from an established ATO view on a technical issue
- the relationship between the parties is such that any proposed ADR is unlikely to be successful.
In-house facilitation is a free service where an impartial ATO facilitator meets with you (and/or your representative) and the ATO case officers to identify the issues in dispute, develop options, consider alternatives, and attempt to reach a resolution. In general the process reduces the time taken to resolve a dispute, saving time and money for you and us.
You can use this service for disputes arising in audits and objections involving indirect tax, small business and individual taxpayers, and privately owned and wealthy groups. In-house facilitation services are intended to be utilised at the pre-litigation stage of a matter, because the tribunal and court resources provide other ADR processes; however, there may be instances during the litigation phase where it would be considered appropriate.
We may settle a dispute where we consider it consistent with good management of the tax system. In doing this we balance our responsibility to collect taxes with the need to administer the tax system sensibly, having regard to relevant factors set out in our Code of settlement, such as the relative strength of the positions, the cost versus the benefits of continuing the dispute and the impact on future compliance for you and the broader community.
You should make any offer to settle a dispute directly to your case officer. In some cases, we might initiate settlement discussions or make a settlement offer. Settlements may also arise as an outcome from alternative dispute resolution processes.
In significant matters, we will generally assign internal technical experts and, if necessary, we may engage external legal advice. Our Technical and Settlement Panel provides guidance on proposed settlement arrangements.
After receiving a position paper from us during the latter stages of an audit, large public or privately owned groups with a turnover of more than $250 million can seek an independent review of the statement of audit position prior to us making our final decision.
The independent review is conducted by a senior officer from our Review and Dispute Resolution area (which is outside the audit area). They will consider the technical merits presented by both the audit team and taxpayer concerning the audit position.
This officer will not have been previously involved in the audit and will bring an independent, fresh set of eyes to the review.
You have the right to object to a range of our decisions, including those relating to assessments, penalties and private rulings. When we receive a written objection application, we appoint a review officer, independent of the original decision-maker.
We will engage with you in a process that typically involves:
- gathering all relevant information relating to the original decision (for example, audit files) and talking to you about any further information available
- examining the grounds for objection and considering the scope of the dispute
- discussions with you to better understand your business context, the relevant facts and your view on the issues
- researching the issue and consulting with technical experts and any other party as necessary, and assessing any new information provided with your objection application or any other clarifying information we may request
- forming a view on the dispute and, where appropriate, discussing alternative ways of resolving the dispute before issuing our decision
- advising you in writing of our decision and outlining your further rights of review or appeal.
Our commitments to service set out what you can expect from us as we process your objection.
You can assist the process by providing all the relevant documentation with your objection and responding in a timely manner if we ask for more information. If we need more time to provide our decision, we may negotiate a longer period with you.
Collecting tax debt when there is a dispute
Our approach to managing disputed debts, and indeed all debts, takes into account each taxpayer’s individual circumstances and the need to prevent those who don't pay from gaining an unfair financial advantage over those who do.
The law requires that tax liabilities be paid by the due date. If you are in dispute with us about your obligations, we will continue to seek payment. However, we recognise the specific issues relating to tax disputes and tailor our approach to address these.
In most lower-risk cases we defer active recovery action until after the dispute has been resolved. We actively manage cases where the debt is greater than $1 million, the taxpayer is either in the large market or is a high-wealth individual, or there are significant revenue or other risks.
If you have a debt and are disputing one or more of your assessments, we encourage you to enter into a ‘50:50 arrangement’, which will reduce the amount of general interest charge (GIC) payable if your objection is unsuccessful.
Under a 50:50 arrangement you pay at least 50% of the disputed amount plus any other outstanding tax debts. You also agree to provide any information that is needed to resolve the dispute. In return, you can defer paying the rest of the amount until the dispute is resolved.
If tax is owed by a non-resident, we may issue a garnishee notice requiring a person who has money belonging to the non-resident to pay any tax due by the non-resident.
If you are dissatisfied with an objection decision, you generally have the right to have the decision reviewed by the Administrative Appeals Tribunal (AAT) or appeal the decision to the Federal Court.
Your application must be lodged directly with either the AAT or the Federal Court.
What to do if you are not satisfied or have a compliment
You have the Commissioner's guarantee that you can provide open and honest feedback, or raise concerns, without it influencing our view or future interactions with us.
At the start of our engagement with you we will notify you of the ATO contact for your case. If you have any issues with how the case is being conducted, you should raise these issues with the case officer first.
We will also provide contact details of an executive level officer. You should contact this officer if your assigned officer does not meet your expectations or you have any other concern.
Talking to us early will help resolve issues. Whenever issues need to be escalated further, you will have access to our decision-makers.
If you are still not satisfied, you can make a complaint. We treat complaints seriously and try to resolve them quickly and fairly. Complaints provide us with important feedback and help us identify ways to improve our service.
If you are happy with our engagement or something or someone has impressed you, please share this with us.
As part of our reinvention, we also encourage you to make suggestions to us about ways we can improve your experience when dealing with the tax and super systems.
When we apply the law to complex facts, disputes sometimes arise. We want to resolve disputes as early as possible by working with you through ongoing discussions. We are increasingly using direct negotiation and alternative dispute resolution as a cost-effective, informal way of resolving disputes.