Objections and resolution services
The ATO has seen a shift from high objection receipts and backlogs in the 2023–24 year to a period of lower objection receipts in 2024–25. A pressure point is the objections from the privately owned and wealthy groups segment which have increased in recent years and are of greater complexity. Objections and Review (O&R) continue to look for opportunities to improve processes to achieve timeliness in the management of objections.
Demand for the dispute assist service is higher than prior years which may reflect the current external pressures in the community. The ATO is focused on formalising a Vulnerability Framework, to outline the ATO’s support for vulnerable taxpayers.
In the 2024–25 year, O&R has focused on progressing the implementation of recommendations made by the Inspector General of Taxation’s (now known as the Tax Ombudsman) Review of the ATO’s administration and management of objections. The key activities to support the recommendations include:
- development of a digital objection form for individuals
- investigation of streamlining options for some low-risk objections
- designing more effective feedback loops with other parts of the ATO.
O&R is developing a strategy to prevent unnecessary objections. Whilst objections are necessary and part of the system, some objections received could be resolved earlier or via an alternative pathway in the office, to provide a better taxpayer experience. Consultation has been undertaken with key internal stakeholders to understand the impact of their audit strategies and to work through design principles to prevent unnecessary objections.
Member comments
A question on the capacity of the dispute assist service to meet the increased demand for the service was asked. We advised that whilst resourcing for the service is limited and the service uses eligibility criteria to select taxpayers to receive assistance, the ATO does support vulnerable taxpayers through other pathways across the organisation as well as referrals made to tax clinics.
ATO independent review services
The small business independent review expansion pilot commenced on 1 July 2024 and is due to end on 31 December 2025. Evaluation of the pilot has commenced. The number for reviews conducted as part of the pilot is less than expected, 29 review cases in the 2025 income year and less than the existing small business independent review service, 50 to 60 review cases per year. There are several possible reasons for the lower-than-expected numbers, including that fewer taxpayers fall within the eligibility criteria in this market segment. So far in the pilot, 3 independent review cases have proceeded to objection. Given that assessments need to issue after the independent review, and the taxpayer then needs to prepare and lodge their objection, this low number may increase over time.
A key benefit of independent review is that all parties are gathered, and the independent reviewer can guide the parties in discussions and provide input when required. Real-time feedback provided to the audit team concluding the case, and a timely process, are also notable benefits. In the expansion pilot, the average amount in dispute is over $1 million, with the research and development tax offset being the most prevalent tax issue. In the Large Market Independent Review Service, receipts have been steady. The key challenge for these reviews is managing timing and the complexity of issues.
Member comments
A question was asked on whether an independent review officer would also be the objection officer, if an unfavourable independent review proceeded to objection, given the benefit of the objection process is that it is an independent process? The ATO advised that, in the expansion pilot, such decisions are made on a case-by-case basis. In most instances there are time and efficiency benefits in having the same officer on the objection, as they have existing knowledge of the case.
Small Business Litigation Funding offering
Members were advised of the decision to end the Small Business Litigation Funding (SBLF) program, with no applications for funding being considered after 30 September 2025. Reasons for ending the SBLF program include; the recent changes to tighten the funding criteria on the basis of integrity (funding no longer offered for fraud and evasion or cash economy matters) had resulted in a reduction of applications and acceptances, and an increased number of litigation matters being managed in-house by the ATO as opposed to engaging external firms and counsel, which would negate the triggering of a referral to the SBLF program where a taxpayer is unrepresented. Funding will continue for those taxpayers currently receiving SBLF, until their matters are finalised in the Administrative Review Tribunal (ART).
With the closure of the SBLF program, the ATO intends to expand the Test Case Litigation Program to ensure funding can still be sought by small business taxpayers for systemic issues in that market segment, precedential matters before the ART or the guidance and appeals panel, and that consideration will be given to a taxpayer’s financial capacity to pay for litigation. Consultation on the changes has commenced and the ATO welcomes further feedback from the members and their professional bodies out of session.
Member comments
Members focused on what other funding options are available to small business taxpayers. Such programs include those offered by the Commonwealth Attorney General, the NSW Bar Association, law firms by way of pro bono initiatives which may have broader eligibility criteria and the Australian Small Business and Family Enterprise Ombudsman’s Tax Concierge Service, that provides subsidised legal advice on lodging an application and navigating the ART process.
Attendees
|
Organisation |
Member |
|---|---|
|
ATO |
Andrew Orme (Chair), Objections and Review |
|
ATO |
Diana Bedelovski, Objections and Review |
|
ATO |
Marielle Delgado, Frontline Operations |
|
ATO |
Michelle Sams, Public Groups |
|
ATO |
Jonathan Todd, Office of the Chief Tax Counsel |
|
Administrative Review Tribunal |
Robert Olding |
|
Chartered Accountants Australian and New Zealand |
Karen Liew |
|
CPA Australia |
Jenny Wong |
|
Law Council of Australia |
Angelina Lagana |
|
The Tax Institute |
Michael Wells |
Guest attendees
|
Organisation |
Attendee |
|---|---|
|
ATO |
Brenden Morley, Objections and Review |
|
ATO |
Brett McNabb, Objections and Review |
|
ATO |
Cassandra Franklin, Office of the Chief Tax Counsel |
|
ATO |
Daniel Nesci, Objections and Review |
Apologies
|
Organisation |
Member |
|---|---|
|
ATO |
Andrew Watson, Individuals and Intermediaries |
|
ATO |
Fiona Knight, Office of the Chief Tax Counsel |
|
ATO |
Jillian Kitto, Frontline Operations |
|
Australian Small Business and Family Enterprise Ombudsman |
Craig Latham |
|
Corporate Tax Association |
Simon Staples |
|
CPA Australia |
Jenny Wong |
|
National Universities Tax Clinics |
Annette Morgan |