The Inspector-General of Taxation published his Review into the Australian Taxation Office (ATO)’s use of early and alternative dispute resolution on 31 July 2012.
The Review examines the effectiveness of the ATO’s dispute resolution practices generally. The Inspector-General was requested to review procedures after a number of concerns were raised by stakeholders. Notwithstanding the ATO’s high level commitment to earlier engagement with taxpayers to resolve disputes (including a requirement for ATO managers to consider the use of ADR in cases being litigated), , it was alleged that the ATO was not making sufficient use of dispute resolution opportunities, instead preferring taxpayers to progress disputes through formal channels.
The Inspector-General found that, at a high level, the ATO is committed to early engagement with taxpayers to resolve disputes. However, he made 21 recommendations for ATO staff to improve and strengthen practices, and the ATO only fully disagreed with one of these.
The Inspector‑General also suggested that the Australian Government consider amending tax laws to give the Commissioner of Taxation the power to extend the objection period at the taxpayer’s request, for the purpose of engaging in ADR processes. The Government has indicated that it will consider this alongside proposals for the reform of self assessment.
The Inspector-General’s report is available here.