About the program
The test case litigation program provides financial assistance for litigation that have tax implications beyond the particular taxpayer dispute.
The program provides financial assistance to taxpayers to help them meet some or all of their reasonable litigation costs.
The funding criteria and expectations have been revised following a review of the program.
Eligibility criteria
A case may be approved for funding if all of the following are satisfied:
- the case involves a legal issue where there is uncertainty or contention about how the taxation or superannuation law operates
- it is in the public interest for the legal issue to be litigated
- providing funding promotes the objects of the program.
Uncertainty or contention about how the law operates
Uncertainty or contention about how the law operates exists where there is a genuine legal question about the meaning, scope, or application of a taxation or superannuation law, such that authoritative judicial clarification would provide guidance. This may arise where:
- the law is ambiguous, or has been subject to limited or conflicting judicial consideration
- established principles have uncertain application to new or evolving factual circumstances.
The program does not fund disputes:
- that turn solely on questions of fact that do not go beyond the particular taxpayer dispute
- where the issue involves a constitutional challenge to the validity of the taxation or superannuation legislation.
Public interest
It is in the public interest for the legal issue to be litigated where judicial clarification of that issue would provide guidance beyond the particular dispute. The focus is on the value of the decision to the tax system as a whole.
Litigation may be in the public interest where judicial clarification would:
- provide guidance that is expected to significantly impact a substantial class of taxpayers or an industry group
- likely provide legal precedent as a principle of law, capable of being used to decide other cases
- address a systemic issue in the administration of the taxation or superannuation law
- promote consistent and efficient administration of the taxation or superannuation law, where the decision would be expected to resolve inconsistent outcomes, repeated disputes or ongoing uncertainty in the application of the law
- provide guidance about how existing law applies in contemporary circumstances due to changes in commercial practice, technology or taxpayer behaviour.
Promotes the objects of the program
Funding will promote the objects of the program where funding is a necessary and proper use of public resources to achieve judicial clarification of uncertain or contentious taxation or superannuation law, and this clarification delivers public benefit beyond the individual dispute.
Funding is desirable to secure litigation of the legal issue where, without funding, there is a material risk that the issue will not be litigated, or the issue will not be properly ventilated and determined in a manner that supports authoritative judicial clarification.
Relevant considerations include:
- the taxpayer’s financial capacity and the likelihood they will fund the litigation. For instance, without public funding, there is a material risk that the taxpayer’s ability to conduct an appeal or respond to an appeal by the Commissioner would be materially impaired, thereby affecting the quality of the Court’s consideration of the legal issue.
- whether the legal issue is already being litigated, or likely to be litigated in another proceeding.
Funding will not generally promote the objects of the program in the following circumstances:
- The case involves conduct relating to tax avoidance, tax evasion or a scheme to avoid superannuation regulatory provisions that undermines the integrity of the taxation or superannuation system, such that public funding would effectively subsidise that conduct rather than support clarification of the law.
- The case results in a windfall outcome or an outcome clearly contrary to the intent of the legislation or public policy.
- The taxpayer’s engagement has not enabled the effective progression or resolution of the dispute because it has not been timely, not been cooperative, or has otherwise impeded progression or resolution of the dispute.
- The taxpayer’s past or present behaviour with respect to their taxation or superannuation obligations indicates non-compliance, for example, non-lodgment, non-payment, or lack of transparency.
Matters in the Administrative Review Tribunal
For a case before the Administrative Review Tribunal, we will also consider whether the case is to be heard by the Guidance and Appeals Panel.
How to apply
If you believe you satisfy all the eligibility criteria, you can apply for test case funding using the Application for test case litigation funding form (NAT 75585).
Applications are considered by a panel of 3 external experts and 2 senior ATO officers. All funding decisions are made by the Chair of the Test Case Funding Panel, taking into account relevant considerations and advice from the Panel.
See the test case litigation register for:
- the next meeting dates for the panel and closing dates for applications
- a list of past and current cases approved for test case funding
- a list of cases declined for test case funding and the reasons why they were declined.
More information
For more information about the test case litigation program, you can:
- email us at ATOLitigationFunding@ato.gov.au
- phone us on 13 28 69 between 8:00 am and 5:00 pm, Monday to Friday, and ask for the test case litigation program
- write to
TEST CASE LITIGATION PROGRAM
AUSTRALIAN TAXATION OFFICE
GPO BOX 4889
SYDNEY NSW 2001