Our dispute resolution strategies

Our aim is to prevent disputes from occurring and where they do occur to resolve them as early, quickly and cost effectively as possible. We recognise that while disputes will occur they also end and that we need to encourage continued willing participation in the tax and superannuation systems. To support this we have introduced or improved a number of dispute management principles, strategies and techniques to avoid, minimise and resolve disputes as early, cooperatively and collaboratively as possible.

Independent review



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End of attention

The independent review service started on 1 July 2013 and is available in large business income tax audits. On 1 July 2014, the service was extended to include all large market audits, including indirect tax and petroleum rent resource tax audits.

Independent review is a key mechanism to resolve areas of disagreement and disputes early prior to an assessment issuing. It provides for a fresh set of eyes, that is, a reviewer who has had no prior involvement in the audit looking at the areas of disagreement from both the taxpayer and our perspective to determine the better view. In 2013-14, the taxpayer was found to have the better view in 46% of cases.

A short term measure of effectiveness is that the majority of eligible taxpayers continue to request a review. In the first twelve months we conducted debriefs with taxpayers after each case. Feedback has been generally positive with advisers and taxpayers indicating confidence in the service and the impartiality and independence of reviewers.

Over the medium to longer term, independent review should lead to fewer cases going to objection and litigation. Of the 54% of reviews that found we had the better view in 2013–14, only one case progressed to objection with the remaining cases in settlement negotiations.

We will continue to consolidate the independent review service. Our key activities include:

  • ensuring that clients are satisfied with the process and service provided
  • ensuring the independence of the process
  • working with clients and stakeholders to develop guidance for taxpayers about information and evidence requirements
  • working with internal stakeholders to embed independent-review-like activities across markets as appropriate
  • working with clients and stakeholders to identify and develop strategies to improve our audit approaches.


We have been working with clients and stakeholders to streamline the code of settlement. The new code is significantly shorter and is positively framed to encourage settlement where appropriate. It will also provide greater opportunity for our officers to consider and initiate settlement discussions. It is expected that the code will be in place from August 2014.

In line with our aim of resolving disputes early more cases are being settled earlier e.g. the number of cases settled before litigation (year to date at 31 May 2014) has increased to 78% from 72% for the same period in 2012–13. The main reasons for settling have been due to the uncertainty in the application of the law and the litigation cost outweighing the benefit.

Table1: Stage at which settlement occurred (year to date at 31 May 2014)

Settlement occurred

Number of cases

























Federal court















Alternative dispute resolution

Alternative Dispute Resolution (ADR) is another of our dispute resolution strategies conducted by private ADR practitioners (including former Federal and High Court judges). In 2013-14, it was considered or used in 39 complex disputes involving large market or high wealth taxpayers (21 prior to litigation). Nineteen ADR processes have been held so far. Approximately 70% of disputes have been fully or partially resolved.

In April 2014, we introduced an in-house facilitation service to resolve less complex disputes. This is conducted by our officers who are trained facilitators. Taxpayers, their agents and our officers can request this service to help resolve less complex disputes involving indirect tax, small business and for individual taxpayers.

Although the in-house facilitation service is relatively new, 17 referrals to facilitation were made from 1 April 2014 to 30 June 2014, seven at audit and 10 at objection. Facilitation has occurred in eight of these referrals. Of the eight facilitations, three resolved the dispute in full, two resolved it in part and three were unresolved. For those cases that were not resolved, considerable progress has been made towards resolution.

See also:


Litigation continues to be a component of our dispute resolution strategy. We will litigate matters where:

  • there is a contentious point of law that requires clarification and it is in the public interest to litigate
  • the behaviour is such that we need to send a strong message to the community
  • the dispute is intractable.

In 2013–14:

  • 80% of tribunal applications were finalised pre-hearing, an increase of 5% from 2012–13
  • there were 60 court and 104 tribunal (down from 125 in 2012-13) decisions.

We are committed to meeting our obligations under the Legal Services Directions to act as a model litigant. In 2013–14, there were 17 alleged breaches of the Legal Services Directions; 23 investigations were concluded, with three breaches identified. We routinely self-report in situations where there is a breach or a perception of a breach. Where a breach occurs, we take prompt mitigation action to ensure that any factors that contributed to breaches are not repeated.

Last modified: 07 Mar 2016QC 41435