The ATO on Thur 5.7.2012, released Draft Practice Statement PS LA 3582 (Exercise of the Commissioner’s discretion under s 8AAZLGA of the TAA to retain an amount that would otherwise be refunded). It provides guidance to tax officers on when it is reasonable to exercise the Commissioner’s discretion to delay a refund amount pending verification of the taxpayer’s entitlement to the amount.
The draft Practice Statement indicates that s 8AAZLGA applies to refunds arising under any taxation law, including GST, income tax, luxury car tax, wine equalisation tax, fuel tax, and resource rent tax. It said the section will particularly apply where there is an entitlement under any taxation law to the refund claimed upon lodgment of a return or other information (“notification”) provided by the taxpayer.
The Draft sets out the factors listed in s 8AAZLGA(2) which the Commissioner must take into account in deciding whether or not to retain a refund, including:
- the likely accuracy of the notified information;
- the likelihood that the notified information was affected by fraud or evasion, intentional disregard of a taxation law, or recklessness as to the operation of a taxation law;
- the impact of retaining the amount on the taxpayer’s financial position;
- whether retaining the amount is necessary for the protection of the revenue, including the likelihood that the Commissioner could recover any of the amount if the notified information were found to be incorrect after the amount had been refunded;
- any complexity that would be involved in verifying the notified information;
- the time for which the Commissioner has already retained the amount;
- what the Commissioner has already done to verify the notified information;
- whether the Commissioner has enough information to make an assessment relating to the amount (including information obtained from making further requests for information);
- the extent to which the notified information is consistent with information that the taxpayer previously provided; and
- any other relevant matter.
COMMENTS are due by 3 August 2012.
[LTN 128, 5/7]