This Practice Statement, released on Thur 15.1.2015, sets out the ATO policy on the settlement of tax and super disputes including disputes involving debt.
It states that settlement negotiations or offers can be initiated by any party to the dispute and can occur at any stage including prior to assessments being raised.
The ATO notes that when deciding whether or not to settle, it will consider all the following factors:
- the relative strength of the parties’ position;
- the cost versus the benefits of continuing the dispute; and
- the impact on future compliance for the taxpayer and broader community.
According to the ATO, settlement would not generally be considered in situations where:
- there is a contentious point of law, which requires clarification; or
- when it is in the public interest to litigate; or
- when the taxpayer’s behaviour is such that it needs to send a strong message to the community.
The ATO notes that it has model deeds available to use as a basis for a deed of settlement.
[LTN 9, 15/1/15]