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  • Independent review – small business pilot

    As part of our dedicated focus to resolve disputes early and improve your tax experience, on 1 July 2018 we started a 12-month pilot to offer an additional independent review service to eligible small businesses disputing income tax audits. The service complemented the existing options for independent review available through the objections process.

    We have now extended the pilot until 31 March 2021.

    The independent review service provides small businesses with an additional option to achieve an early and fair resolution of their dispute where they disagree with the outcome of an audit. It is available to eligible small businesses in addition to other dispute options.

    In an independent review, an independent technical officer from outside the audit area reviews the facts and technical merits of the audit position. They complete their review before the assessment or amended assessment is issued to the small business in relation to the audit.

    A case officer will contact eligible small businesses with an audit in progress before issuing assessments. They will then be offered the opportunity to participate in the extended pilot.

    Find out about:

    The position paper process

    As part of developing an ATO position, you are given the opportunity to respond to the audit team's findings, as disclosed in the interim position paper.

    Your response and areas of disagreement are considered by the audit team when developing the final audit letter which is then communicated to you.

    You may request an independent review if you disagree with some or all of the final audit letter and you have received an offer for an independent review. See How to request an independent review.

    The independent review process

    The independent review is conducted by an officer from our Review and Dispute Resolution area. They will not have been involved in the audit earlier and will bring a fresh perspective to your review. They will focus on the areas of disagreement identified in your request, and will maintain independence throughout the process.

    The independent reviewer will consider the documents setting out your position and the audit position. They will schedule an informal meeting (a case conference) with you (and your representatives) and the audit team. This will generally be within three weeks of receiving your review request.

    The case conference is an opportunity for all parties to assist the independent reviewer to understand the facts and contentions.

    The independent review will not generally consider new facts, evidence or arguments that are material and have not been raised during the audit. In limited cases the independent reviewer may request additional material to understand a position that has been put forward by the taxpayer during the audit. You will have 14 days to provide this information.

    If new facts, evidence or arguments are introduced, the independent review may be placed on hold so the audit team can consider this material at first instance. In some cases, the independent review will be finalised and the audit team will be asked to consider any new material and re-issue a final audit letter. You may receive another offer for independent review if we consider it appropriate under the circumstances.

    The independent reviewer will consider both parties’ positions and prepare recommendations on the appropriate outcome. They will communicate the outcome to you and the audit team, who will finalise the audit in accordance with the independent reviewer’s recommendations.

    Your objection rights under Part IVC of the Taxation Administration Act 1953 are not impacted by your participation in the independent review process. This means that if you disagree with the outcome of the audit following the independent review you can still object to any assessments or amended assessments. These options are explained further below.

    Maintaining the independence of the review process

    We are committed to ensuring the independence of our review process. We ask that participants do not contact the independent reviewer to discuss their position – these discussions should be reserved for the case conference.

    The independent reviewer will obtain the documents relevant to the final audit letter from the audit team.

    How to request an independent review

    Your audit case officer will contact you if you are eligible for an independent review. A written offer of independent review will also be included in the audit finalisation letter.

    If you wish to proceed with the review, you need to email us at within 14 days of the date of the audit finalisation letter. Where certain circumstances exist, we will consider extending the period to a maximum of 30 days from the date of the audit finalisation letter. You must clearly outline the specific issues you dispute from the audit decision in your request.

    Once you have submitted your request, you will be contacted by a Review and Dispute Resolution officer to discuss your request. They may discuss other options for addressing the issues you have raised. If eligible, your request will then be referred to an independent reviewer to undertake the review. If a request for independent review is declined, we will tell you the reasons why.

    We may ask you to complete and return a consent form to extend the amendment period. This will allow the review to be completed before the period of review ends. You will need to provide this form before we can commence the independent review.

    Who is eligible to participate in the pilot

    Small businesses disputing the following audits are eligible for the pilot:

    • income tax
    • GST
    • excise
    • luxury car tax (LCT)
    • wine equalisation tax (WET)
    • fuel tax credits (FTC).

    All eligible small businesses will receive a written offer to request an independent review.

    The following disputes are excluded from the independent review service:

    • superannuation
    • fringe benefits tax
    • fraud and evasion findings
    • interest.

    When is an independent review not available

    It is important that we maintain our expectations of you to:

    • comply with your obligations under the tax law
    • contact us as soon as possible if you have difficulty in complying.

    In delivering the independent review service, you can expect us to:

    • conduct the review with independence from the audit team
    • provide you with an opportunity at the independent review meeting (case conference) to present your story
    • treat you fairly, reasonably and consistently
    • consider your circumstances.

    In light of our expectations, you are not eligible for an independent review if either:

    • when requested you do not complete a consent to extend the amendment period, to allow the review to take place
    • the relevant notice of assessment or amended assessment has already issued
    • you were disengaged throughout the audit process – this means that you  
      • failed to respond to attempts of contact from the audit team by failing to return phone calls or reply to correspondence and
      • failed to provide requested information or documents, or failed to attend meetings with the audit team and
      • failed to respond to the audit teams' interim position paper
    • we have serious concerns that you do not intend to comply with the payment of any potential assessments following the outcome of the independent review.

    Other dispute and resolution options

    You will retain your full dispute and objection rights even if you seek an independent review. You will also retain these rights if you are not eligible for an independent review or if you choose not to seek an independent review.

    This means that you may:

    • lodge an objection to any amended assessments or notices which issue to you. Your objection will also be dealt with independently by the review by the Review and Dispute Resolution area
    • consider using the ATO’s in-house facilitation service to assist in resolving your dispute.

    You may also consider raising your matter with:

    • The Inspector General of TaxationExternal Link – The Inspector General of Taxation can assist you with concerns or complaints you may have in relation to the administrative actions taken by the ATO or the Tax Practitioners Board.
    • The Australian Small Business and Family Enterprise OmbudsmanExternal Link – The ASBFEO can assist and provide general information on how to resolve a dispute, facilitate discussions between you and the ATO. They can provide access to external alternative dispute resolution (ADR) services or refer you to another Commonwealth, state or territory agency who can more appropriately deal with your matter.

    See also:

      Last modified: 02 Dec 2020QC 55900