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  • Applying for compensation

    You can apply for compensation from us if:

    • our actions give rise to a legal liability (for example, negligence)
    • you have financial losses caused by our defective administration.

    Any individual, company or other organisation can submit an application for compensation. You can do this yourself or through a third party, such as a lawyer or registered tax professional.

    To apply for compensation, complete the Applying for compensation claim form. Attach all relevant documentation to support your claim. You can mail, fax or email your claim to us at the addresses at the end of the form.

    Next step:

    On this page:

    How we assess claims

    We assess claims for compensation in two ways, either:

    • because there may be a legal liability (for example, negligence)
    • under the Scheme for Compensation for Detriment caused by Defective Administration (CDDA scheme).

    Officers in our General Counsel assess compensation claims. They are independent of the ATO area that dealt with your matter before.

    We decide claims on the basis of legal liability in line with legal principle and practice. Any settlement must be consistent with our obligations under Appendix C to the Legal Services Directions 2005External Link.

    We decide CDDA claims in line with the Department of Finance's Resource Management Guide 409External Link.

    If compensation of either of these types is not appropriate, you may be eligible for an act of grace payment. The Department of Finance administers these payments, not the ATO. See act of grace paymentsExternal Link information on the Department of Finance website.

    See also:

    Losses we can consider

    We can consider compensating you:

    • for financial losses caused by the ATO's defective administration
    • where our actions give rise to a legal liability.

    These losses include:

    • professional fees you incurred to resolve a problem that we caused
    • interest for unreasonable delays in providing you with a payment, if no statutory interest can be paid
    • bank or other administrative fees you incurred because of our defective administration.

    Losses we cannot consider

    Generally, we cannot compensate for the following types of losses, because of legal liability or under the CDDA Scheme:

    • inconvenience and your personal time spent resolving an issue
    • stress, anxiety or hurt that is unrelated to a personal injury which is being compensated under the CDDA Scheme
    • interest for delays in receiving payments from the ATO where statutory interest is payable
    • costs of complying with the tax system, including costs associated with audits, objections and appeals (even if we find you complied with your obligations or change our decision in your favour)
    • costs of applying for compensation or communicating with us about your claim
    • taxation or other Commonwealth liabilities where you have substantive review rights that you have not pursued.

    Compensation payments cannot offset tax debts that you owe. See information to help you manage your debt at Help with paying.

    What happens when you make a claim

    We aim to send you written acknowledgement of your compensation claim within seven business days of receiving it. Where possible we will give you the name and contact details of the person managing your claim.

    For straightforward claims, once you give us all the necessary information to support your claim, we aim to give you our decision within 56 days.

    For more complex claims, we aim to give you our preliminary view within 56 days. You can then comment on our view.

    We may take longer to investigate and consider some claims with complicated facts or that extend over long periods of time. In these cases, we will contact you about an extended date for our decision.

    If you did not give us all the information to make a decision, we will contact you to discuss what information you may be able to provide.

    Any other dispute resolution processes you are involved in need to be resolved before we will consider your claim. This includes:

    • court or tribunal action
    • an active complaint with the Inspector-General of Taxation.

    Receiving payment

    If your claim is successful, we will transfer the payment electronically into your nominated bank account.

    If you're unsure whether the payment is taxable, you can contact us or a registered tax professional.

    See also:

    Reviewing the decision

    We offer internal review if you can provide new and relevant information or contentions to support your claim. Information about internal review is on your compensation decision letter.

    Inspector-General of Taxation

    The Inspector-General of Taxation can investigate most complaints related to tax administration, including the handling of compensation claims. The Inspector-General has no power to overturn or vary our decision but may make recommendations to us about how we handled the claim.

    You can contact them via the Inspector-General of TaxationExternal Link website or by phone on 1300 448 829.

    Small business compensation assistance

    The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) can help small businesses seek compensation from the ATO for defective administration.

    For more information:

    More information

    For more information about applying for compensation:

    Last modified: 09 Apr 2020QC 17735