Where you are likely to conduct your business activities in a complex commercial and legislative environment, disputes can occur when tax law is applied to complex facts.
We want to resolve issues directly with you as early and cooperatively as possible, so that we arrive at sensible positions and to minimize disputes arising. Ideally, these discussions should begin when the issue is first identified, such as in a compliance review, audit or private ruling.
When disputes do occur, we want to resolve them early to avoid litigation where possible. We have a range of dispute resolution strategies available to resolve issues as early as possible.
Our preferred method to resolve disputes is through direct contact and negotiation with you and your representative. The overwhelming majority of disputes are resolved this way.
If you are concerned about our compliance activity, we encourage you to discuss the issue with your nominated ATO case officer.
Although we always attempt to resolve disputes directly with you and your representatives in the first instance, we will also consider whether an alternative dispute resolution (ADR) process may assist.
ADR is a cost-effective, informal and timely way to resolve disputes. It uses an independent third party to assist in resolving the dispute and can also be useful in narrowing the issues in dispute.
ADR may not be appropriate if, for example:
- it would be in the public interest to have judicial clarification of the issues in dispute
- resolution can only be achieved by departure from an established ATO view on a technical issue
- the relationship between the parties is such that any proposed ADR is unlikely to be successful.
- ATO plain English guide to alternative dispute resolution
- PS LA 2009/9 Conduct of Tax Office litigation
- PS LA 2013/3 Alternative Dispute Resolution (ADR) in ATO disputes
In-house facilitation is a service where an impartial ATO facilitator meets with you (and/or your representative) and the ATO case officers to identify the issues in dispute, develop options, consider alternatives, and attempt to reach a resolution.
We may settle a dispute where we consider it consistent with good management of the tax system. In doing this we balance our responsibility to collect taxes with the need to administer the tax system sensibly, having regard to relevant factors set out in our Code of settlement, such as the relative strength of the positions, the cost versus the benefits of continuing the dispute and the impact on future compliance for you and the broader community.
You should make any offer to settle a dispute directly to your case officer both in writing and personally. In some cases, we might initiate settlement discussions or make a settlement offer. Settlements may also arise as an outcome from ADR.
In significant matters, we will generally assign internal technical experts and, if necessary, we may engage with external legal advisors.
After receiving a position paper from us during the latter stages of an audit, large public or privately owned groups with a turnover of more than $250 million can seek an independent review of the statement of audit position prior to us making our final decision.
The independent review is conducted by a review officer from our Objections and Review area (which is independent of our audit area). They will consider the technical merits presented by both the audit team and clients concerning the audit position.
This officer will not have been previously involved in the audit and will bring an independent, fresh set of eyes to the review.
You have the right to object to a range of our decisions, including assessments, penalties and private rulings. When we receive a written notice of objection, it is considered by a review officer, from our Objections and Review area, independent of our audit area and the original decision-maker.
The review officer will engage with you in a process that typically involves:
- discussing issues with you to better understand your business context, the relevant facts and your view on the issues
- gathering all relevant information relating to the original decision (for example, audit files) and talking to you about any further information which you can provide
- examining the grounds for objection and considering the scope of the dispute
- researching the issue and consulting with technical experts and any other party as necessary, and assessing any new information provided with your objection application or any other clarifying information we may request
- forming a view on the dispute and, where appropriate, discussing alternative ways of resolving the dispute before issuing our decision
- advising you both over the phone and in writing of our decision and outlining your further rights of review or appeal if appropriate.
Our commitments to service set out what you can expect from us as we review your objection.
You can assist the review by providing all the relevant documentation with your objection and responding in a timely manner if we ask for more information. If we need more time to provide our decision, we may negotiate a longer period with you.
- Dispute or object to an ATO decision
- Our commitments to service
- Amendment and objections – early engagement
Our approach to managing disputed debts, and indeed all debts, takes into account each client’s individual circumstances and the need to prevent those who don't pay from gaining an unfair financial advantage over those who do.
The law requires that tax liabilities be paid by the due date. The due date for tax liabilities is established by law and is not varied if you lodge an objection or start legal proceedings. If you are in dispute with us about your obligations, we will continue to seek payment. However, we recognise the specific issues relating to tax disputes and tailor our approach to address these.
We case manage disputed debts that are:
- high dollar value
- related to certain client segments including large market and high wealth individuals
- significant risks to revenue.
If you have a debt and are disputing one or more of your assessments, we encourage you to enter into a ‘50:50 arrangement’, which will reduce the amount of general interest charge (GIC) payable if your dispute is unsuccessful.
Under a 50:50 arrangement you pay at least 50% of the disputed primary tax amount plus any other outstanding undisputed tax debts. You also agree to provide any information that is needed to resolve the dispute in a timely fashion. In return, we agree to defer recovery action on the debt in dispute until the conclusion of the dispute. A concessionary GIC remission is also provided over the term of the dispute.
In some lower-risk cases during the objection stage we would not seek to take recovery action until the objection is finalised. During later stages of dispute at the Administrative Appeals Tribunal (AAT) and Federal Courts, clients are expected to enter into a 50.50 arrangement or provide security in order to obtain a deferral of recovery action.
If you are dissatisfied with an objection decision, you generally have the right to have the decision reviewed by the (AAT or appeal the decision to the Federal Court).
Your application must be lodged directly with either the AAT or the Federal Court, and the law gives strict timeframes in which to do this. Participation in ADR processes does not vary these strict timeframes.
At the start of our engagement with you we will notify you of the contact officer for your case. If you have any issues with how the case is being conducted, you should raise these issues with the case officer first.
Talking to us early too will help resolve issues. Whenever issues need to be escalated further, you will have access to our decision-makers.
If you are still not satisfied, you can make a complaint. We treat complaints seriously and try to resolve them quickly and fairly. Complaints provide us with important feedback and help us identify ways to improve our service.
If you are happy with our engagement or something or someone has impressed you, please share this with us either verbally or in writing.
As part of our continuous improvement in client service, we also encourage you to make suggestions to us about ways we can improve your experience when dealing with the tax and super systems.
See alsoWhen we apply the law to complex facts, disputes sometimes arise. We want to resolve disputes as early as possible by working with you. We are increasingly using direct negotiation and alternative dispute resolution (ADR) as a cost-effective, informal way of resolving disputes.