Show download pdf controls
  • ATO settlements fair in the eyes of the ANAO

    The ATO is effective, comprehensive and fair in using settlements to resolve taxpayer disputes, according to an Australian National Audit Office (ANAO) report released today.

    Deputy Commissioner Debbie Hastings said the ANAO’s review of the ATO’s use of settlements highlights the improvements made in recent years to resolving taxation, superannuation and debt disputes with taxpayers.

    “The ATO does not settle disputes at any cost. The sensible use of settlements is part of our increasing commitment to earlier and more effective dispute resolution, with a focus on ensuring future compliance of the taxpayer,” she said.

    The ANAO report makes specific observations around the ATO’s use of settlements to resolve disputes with large market taxpayers and multinationals.

    “While our number of settlement cases with the large market is low, their significance to Australia’s revenue base is high,” Ms Hastings noted.

    “In 2016-17, less than six per cent of all ATO settlements were in the large market but in total they accounted for over 52 per cent of the total value of settlements.

    “To provide greater community confidence around settlements in the large market, the ATO implemented an Independent Assurance of Settlements (IAS) review program by engaging three retired Federal Court judges as independent assurers.

    “Soon after a settlement takes place, an assurer reviews the case independently to provide the ATO with assurance that cases have been settled for the right reasons.

    “Since 1 July 2016, these judges have reviewed nine settlements, including four matters identified under the Tax Avoidance Taskforce.

    “In each case, the assurers have found each settlement to be a fair and reasonable outcome for the Australian community.

    “We believe this assurance process strikes the right balance between the importance of maintaining confidentiality of taxpayer information and the community’s interest in the integrity of the tax system, including the appropriateness of settlements.”

    In its report, the ANAO reinforced the ATO’s conformance with settlement procedures and policy was highest in the area of the ATO that deals with large market taxpayers.

    The report also identifies the ATO has the highest level of transparency on public reporting around settlements when compared to other international revenue authorities. This includes publishing the number and dollar amount of settlements in the ATO’s annual report, split by market segment.

    The ANAO noted the ATO’s use of consultative forums with external representatives from the tax profession and industry bodies to discuss and develop dispute resolution strategies. Through these forums the ATO has been able to gain valuable external insights which have contributed to the development of a range of useful ATO products and guidance on dispute resolution.

    The ATO embarked on a significant program of work in 2014 to refresh and improve its settlement policies, processes and guidance.

    “While it is positive to hear recognition of our work to date, we also welcome recommendations for areas where the ATO can continue to improve internal conformance with settlement policy and procedures,” Ms Hastings said.

    “Where further opportunities for ongoing improvements are identified through our IAS program, we will continue to ensure we remain as the forefront of best practice and give the community confidence we are settling the right cases in the right way.”

    More information

    To read the ANAO’s report, visit: Link

    To read more about the ATO’s Code of settlement, see:

    To read about the ATO’s approach to resolving disputes, see:

    Last modified: 13 Dec 2017QC 54078