The Inspector General of Taxation is conducting 3 investigations and seeking submissions on the ATO’s (1) management of objections; (2) exercise of its (unappealable) general powers of administration; and (3) exercise of the Remedial Power. Submissions are due by 28 March and also 28 February 2022.
(1) The ATO’s Management of Objections.
The IGTO will examine whether:
- the ATO’s systems and processes for receiving, allocating, considering and finalising objections are sufficiently robust to minimise undue delay;
- the policies and processes for managing objections provide for an independent and impartial review of the audit decision;
- 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;
- 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
- any other relevant or related matters identified by the IGTO throughout the course of the investigation, or as raised by stakeholders in submissions.
Submission due 28 March 2022.
(2) The ATO’s exercise of the General Powers of Administration.
The IGTO’s investigation does not propose to examine every type of decision that may be made under the GPA, but will draw from case studies in our complaints investigation service as well as stakeholder submissions to identify and investigate particular areas raised as examples of exercise of the GPA that should be investigated. In particular, the IGTO is interested to understand how broad-based GPA decisions (i.e., those affecting large groups of taxpayers) are identified and determined. As there are limited avenues for taxpayers and tax practitioners to challenge the exercise of the GPA, it is important to ensure that processes and procedures underpinning these decisions are robust and effective.
Submission due 28 February 2022.
(3) The ATO’s exercise of the Remedial Power.
Through the IGTO’s tax complaint investigation service, it has been observed that there appears to be a lack of clarity about how issues are raised for CRP consideration and whether the processes underlying consideration of these matters are sufficiently robust to take into account consideration of relevant factors and expert stakeholder views. This is important as decisions of the Commissioner in relation to the CRP are not subject to external merits or judicial review.[1]
The IGTO’s investigation will examine:
- the processes by which (potential) CRP matters are identified, including the processes by which the ATO assures itself that it has sought to adopt a purposive interpretation of the law;
- the processes by which (potential) CRP matters are considered, including the application of the criteria in Division 370 of Schedule 1 to the Taxation Administration Act 1953;
- the regulatory and compliance impact (including the frequency and circumstances) of the use of the CRP[2];
- whether the ATO’s systems and processes to receive, consider and determine CRPs are operating effectively, efficiently and with timeliness and transparency taking into account all relevant factors and stakeholder feedback;
- how consideration and decisions in relation to the CRP are recorded and communicated, both internally and externally;
- whether processes in relation to the CRP are well-known and well-understood across the tax practitioner community and within the ATO;
- how the ATO engages with stakeholders as part of its CRP consideration; and
- any other relevant matters that arise during the course of the IGTO investigation or as identified by stakeholders in submissions.
Submission due 28 February 2022.
[Tax Month – January 2022 – Previous 2021] 24.1.22