What do I do if I have a dispute with the ATO?
Irish Bentley Lawyers have a significant level of experience in resolving tax problems with the Australian Taxation Office’s (‘ATO’) that draws from our lawyers’ extensive knowledge of the tax dispute process. If you need to object to an ATO decision you have found the best tax dispute lawyers in all of Queensland!
Recent statistics reinforce our previous article regarding tax disputes with the ATO that sets out the percentage of successful taxpayer contests to assessments in the period from 1 July 2007 to 29 February 2012. This page looks at how this trend has continued to progress since 2012 and the upshot is that early negotiation has proven more successful than in the past. Recent data released in the ATO 2014 Commissioner of Taxation Annual Report shows that ATO audits occur often, and engaging a tax dispute lawyer and lodging an objection has real merit.
ATO Tax Dispute Statistics
- 5% of tax re-assessments are objected to;
- 4% of objections proceed to a court hearing; and
- In 40% of hearings the taxpayer is successful.
- Of the 16.5 million returns were lodged in 2013-2014 with 5.3 million compliance checks ranging from data-matching to complex ATO audits performed in 2013-2014.
- Of the 500,501 adjustments arising from audits the ATO received 24,830 objections (see below for objection statistics).
- About 5% objected to re-assessment.
- Of these 24,830 objections, 840 cases were lodged to courts/tribunals (about 4%).
- Of these, 77.0% of cases settled prior to litigation compared to 72.0% for the same period in 2012–13.
- In 2013–14, 16 test cases resulted in 14 court decisions with 6 in favour of the taxpayer (42.8%) and 8 in favour of the Commissioner.
The Basic ATO Tax Dispute Process
A very basis overview of the tax dispute with the ATO process is as follows:
- Receive your Notice of Assessment;
- Within two (2) years, lodge an objection;
- The ATO re-assesses the decision;
- If the ATO rejects the objection, apply to the Administrative Appeals Tribunal or the Federal Circuit Court for review.
As of 1 July 2013 the ATO has overhauled its tax review strategies to encompass a system of independent review. This basically means that if a tax decision has been made that you do not agree with, there is the option to have a fresh set of eyes look over the decision. The ATO has implemented this scheme to attempt to reduce the number of cases subject to objection, and ultimately, litigation.
Furthermore, the ATO has recently introduced a ‘Code of Settlement’ which intends to “resolve matters in dispute where one or more parties make concessions on what they consider is the legally correct position”. Although this scheme serves to streamline a complex process, it does still require having a thorough understanding of a complicated area of law.
What do I do if I Have a Dispute with the ATO?
As can be seen below, the highest demographic for objections is the general public. Statistically, this illustrates that the average person is the demographic most likely to face tax problems. Fortunately this is something that can be resolved in an efficient and simple manner by engaging a tax dispute law firm with specialised tax dispute lawyers to conduct the dispute with the ATO. As the above statistics show, 96% of disputes were resolved at the objection and 77% of cases were settled before litigation. There is substantial merit in addressing the issue quickly with a specialised lawyer so that an expedient resolution may be reached without the need or cost of litigation. The test cases conducted in 2013-2014 indicate that neglecting to address the issue with a professional at an early stage incurs a higher risk of unsuccessfully challenging the case before the courts.
Irish Bentley Lawyers are your “Tax Dispute Lawfirm” due to their significant level of experience with disputes with the ATO as well as in taxation litigation across various Courts and Tribunals. We have also been involved in a variety of taxation objections, reviews and appeals and have contested tax assessments exceeding $50 million. Furthermore, we can assist clients with private ruling applications, ATO audits and reviews of their taxation affairs. We have also assisted a range of clients who are struggling with taxation debts to come to arrangements whereby insolvency solutions can be avoided, such as applications to pay taxation debts by instalments and applications for the remission of general interest charge and shortfall interest charge. We prefer to provide most of our services on a fixed price basis (rather than a time basis) where possible.
Please note that the above does not constitute legal advice and Irish Bentley Lawyers make no representations or warranties as to the accuracy of any of the information contained herein. If you have a taxation issue, then please do not hesitate to contact the team at Irish Bentley Lawyers – there is no substitute for proper legal advice based on your individual and unique circumstances.
1Standing Committee on Tax and Revenue, Submission 10 to Australian Taxation Office, Tax Dispute Inquiry, 11 December 2014 at pg. 2.
2Note that these figures are higher in Australian Taxation Office, Submission 2 to the Tax and Revenue Committee, 2014 Annual Report of the Australian Taxation, 27 February 2015 at para 45: 27,951 objections, 1079 appeals to courts/tribunals and 169 cases that proceeded to hearing.
3Australia Taxation Office, Code of Settlement (15 October 2014) Australian Taxation Office https://www.ato.gov.au/General/Dispute-or-object-to-an-ATO-decision/In-detail/Avoiding-and-resolving-disputes/Settlement/Code-of-settlement/.