The Government on Tue 31.7.2012, released the Inspector-General of Taxation’s report examining the effectiveness of the ATO’s dispute resolution practices including early dispute resolution and alternative dispute resolution (ADR).
The Inspector-General observed that, at a high level, the ATO was committed to engaging with taxpayers to resolve disputes earlier. However, he also identified some areas in which he considered the ATO could improve and strengthen its practices.
The report made 22 recommendations, of which 21 were directed to the ATO. The ATO has agreed in full with 14, agreed in part with 4, agreed in principle with 2 and disagreed with one. The ATO did not agree with Recommendation 6.1 which broadly proposed that the ATO undertake a pilot separation of its objection and litigation functions from its audit function in the management of its most complex disputes.
The remaining recommendation was directed at the Government. The Inspector-General suggested the Government consider amending the tax laws to give the Commissioner the power to extend the objection period, at the taxpayer’s request, prior to the expiry of this period for the purpose of engaging in ADR processes. The Government said it “will give detailed consideration to this recommendation once it receives the Inspector-General’s report from his current review into improving the self-assessment system.”
The Inspector-General said the effective implementation of the agreed recommendations should result in significant improvements in the way the ATO seeks to resolve tax disputes. However, he added that “given the disagreement on one major recommendation and the partial or qualified response to a number of other recommendations, the impact of this report and its recommendations may not be fully realised.”
The report is available on the Inspector-General’s website.
Source: Assistant Treasurer’s media release No 081, 31 July 2012
[LTN 146, 31/7]