The Australian Taxation Office’s Administration and Management of Objections – Phase 2

TERMS OF REFERENCE

The IGTO’s investigation will examine the concerns raised above and seek to identify improvements to objection processes for the benefit of taxpayers and tax practitioners. Specifically, the IGTO will examine whether:

  1. the ATO’s systems and processes for receiving, allocating, considering and finalising objections are sufficiently robust to minimise undue delay;
  2. the policies and processes for managing objections provide for an independent and impartial review of the audit decision;
  3. the current processes for managing Objections allows for sufficient engagement, interaction and exchange with taxpayers and their representatives to achieve a common understanding of, and to narrow, the issues in dispute;
  4. the Objections process is effective in minimising and resolving disputes, including through early and effective identification of cases that are suitable for alternative dispute resolution and /or settlement; and
  5. any other relevant or related matters identified by the IGTO throughout the course of the investigation, or as raised by stakeholders in submissions.

The IGTO welcomes feedback from stakeholders – including professional and industry bodies, tax practitioners and taxpayers – on any concerns they have in relation to the objection process and potential improvements that may be implemented to improve the process for the benefit of all.

How to lodge a submission

The closing date for submissions is 4 November 2022. Submissions may be lodged by telephone (02 8239 2111) or be sent by:

Post to:Inspector-General of Taxation and Taxation Ombudsman GPO Box 551 Sydney NSW 2001
Fax:(02) 8088 7815
Email to:[email protected]

Review: The effectiveness of ATO communications of taxpayers’ rights to complain, review and appeal

This investigation examines the effectiveness of the Australian Taxation Office’s (ATO) communications to taxpayers and their representatives of their taxpayers’ rights to review, complain and appeal decisions made and actions taken by the ATO.

The investigation involved an examination of a case sample of written communications of ATO decisions made – for clear communication of the taxpayers’ rights to review, complain and appeal these decisions. The communication of taxpayers’ rights is an important feature of procedural fairness and is consistent with the Taxpayers’ Charter. These rights and the community’s awareness of them is important for maintaining confidence in the fairness of the tax administration system.

Tax Ombudsman survey

Between August and September 2020, we engaged Orima Research Pty Ltd to conduct a voluntary and independent survey to gauge taxpayers’ and tax professionals’ views on the effectiveness of ATO communications on taxpayers’ right to review, complain and appeal decisions.

The survey comprised 10 questions (of which 3 sought demographic information from respondents). A list of the questions is available for download.

A total of 69 respondents participated. Some respondents chose not to answer certain questions.

Documents and downloads

Review: Goods and Services Tax refunds

Our review into Goods and Services Tax (GST) refunds
arose from concerns raised through the our complaints handling service and during consultation to develop the 2017 work program. These concerns included the accuracy of the ATO’s risk assessment tools, its engagement with taxpayers and its efforts to minimise adverse impacts on affected taxpayers.

We reviewed the end-to-end process involved in refund verification including from initial case selection through to the review and audit activities. Overall, we found that the ATO’s administration of GST refunds operated efficiently with the vast majority of refunds released without being stopped for verification.

We made 5 recommendations (comprising 16 parts), all of which were agreed either in full or in part.

Downloads and documents

Review: Taxpayers’ Charter and taxpayer protections

Our review into the Taxpayers’ Charter (Charter) and taxpayer protections was undertaken to examine concerns raised in relation to the Australian Taxation Office’s (ATO) adherence to the Charter, its currency and effectiveness. Specifically, stakeholders consider that there are limited avenues for enforcement of the Charter principles, diminishing its effectiveness in affording protection to taxpayers.

As part of the review, we compared the Australian approach with those partner jurisdictions, such as the United States of America, the United Kingdom, Canada and New Zealand. Additionally, a significant body of academic and other research was considered, including those of the Organisation for Economic Cooperation and Development, the International Bureau of Fiscal Documentation and professional bodies
(including the Asia-Oceania Tax Consultants’ Association, Society of Trust and Estate Practitioners and Confederation Fiscale Europeene) that collectively represented more than half a million tax practitioners worldwide. Moreover, the IGT also commissioned the University of New South Wales to research and report on existing taxpayer rights in
Australia and, from that research, drew observations regarding the difficulties taxpayers may face in seeking to enforce their rights.

Overall, we made 4 recommendations with which the ATO has either agreed in full, in part or in principle. However, the ATO’s level of agreement and their accompanying commentary create a level of uncertainty as to how and to what extent the recommendations
would be implemented. Accordingly, to the extent that stakeholder concerns persist, we may undertake a follow-up review to assess the effectiveness of resulting ATO actions and, if necessary, make recommendations for government to consider mandatory reporting of the
ATO’s compliance with the Charter and additional enforceable remedies.

Documents and downloads