On 29 June 2018, the ATO announced that it will be running a 12-month pilot (from 1 July 2018) to extend its independent review service to certain small business taxpayers.
An independent review is where an independent technical officer from outside the ATO’s audit area reviews the merits of the ATO’s audit position before the assessment or amended assessment is issued. This has been available to large taxpayers for some years and been a sufficient success for the ‘small end of town’ to start clamouring for it.
This will be limited to income tax and will involve audits in South Australia and Victoria. Disputes relating to the following topics are excluded: GST, superannuation, FBT, fraud and evasion findings, and penalties and interest.
Eligible businesses with an audit in progress will be contacted directly by their case officer and offered the opportunity to participate in the pilot, the ATO said. No ‘smallness’ parameters are mentioned, save that the offer to participate will come from the ATO’s ‘Small Business’ area. The ATO’s website doesn’t say that you can request an independent review, if one is not offered to you (but if you are in Victoria or South Australia, you might as well ask).
The independent review is conducted by an officer from the ATO’s Review and Dispute Resolution business line. This officer will not have been involved in the audit and will bring an independent ‘fresh set of eyes’ to the review.
The ATO also makes clear that this does not close out any of the other review options, including objecting to any amended assessment that issues; ‘in-house’ facilitation of dispute resolution; a complaint to the Inspector General of Taxation (now the Federal Tax Ombudsman) and the Australian Small Business Ombudsman.
FJM 14.7.18
[ATO website: Pilot: LTN 127, 5/7/18; Tax Month – July 2018]
Comprehension questions (answers available)
- Is the ATO announcing pilot to test same kind of pre-amendment independent review, of the ATO’s audit position paper, as has been available, for some years now, to large business?
- Is it available in all states but Victoria and South Australia?
- Does it extend to disputes about GST, superannuation and FBT?
- Will the review be conducted by the same department as the auditors?
- Will this limit other review, complaint and objection options?
