In the keynote address on Tue 20.1.2015, at the Australasian Tax Teachers’ Association 27th annual conference, ATO Second Commissioner Andrew Mills outlined some of the recent changes and developments at the ATO.

Mr Mills said the ATO supports the creation of a separate area within the ATO to manage disputes for all taxpayers. As was discussed in hearings with the House of Representatives Committee, an appropriate level of separation, independence and transparency can be achieved by moving all objections from the Compliance Group to the Review and Dispute Resolution business line, he said. This would be in line with current practice in leading tax administrations like the US Internal Revenue Service and the Canada Revenue Agency.

Other issues Mr Mills commented on included:

  • The ATO has established a separate Review and Disputes Resolution Business Line in its Law Design and Practice Group.
  • While other objections are currently still managed within the Compliance Group, that is undertaken in a separate area from the original audit team and decision maker.
  • The ATO has commenced more than 200 taxpayer risk reviews on multinational companies, including 25 tech companies or companies that conduct a significant portion of their business digitally. It has commenced 20 audits where it has identified significant concerns. By the second half of this year, Mr Mills said the ATO expects to see some of these cases tested in court.
  • The ATO is currently evaluating the pilot of its External Compliance Assurance Process (ECAP) project and expects that recommendations concerning the future of ECAP in the longer term will be made next month. The objective of ECAP is to provide certainty more quickly to taxpayers by offering them the choice of nominating their statutory company auditor to undertake factual findings work or for the ATO to undertake the risk assurance work.

The consultation phase of the proposal to establish a statutory remedial power for the Commissioner is now complete and the working group has produced a joint Statement of Intent about what such a remedial power could try to achieve. Mr Mills said the proposal now needs to be considered by government to progress this concept.

[LTN 12, 20/1/15]