Australian Taxation Office (ATO) Disputes

Tax Law: 18 March 2019

When are you in dispute with the ATO? If you do not agree with a decision or action by the ATO, such as an investigation or audit, assessment of tax liability, objection decision or enforcement action, you are in dispute.

It pays to know what to do in this situation. Rather than the 'ostrich head in the sand' approach, seeking resolution of outstanding issues at the earliest opportunity can save clients time and money in the long run. The earlier in the life cycle of a dispute you engage with the ATO, the more options you may have.

For example, where the ATO has commenced an investigation or audit the earlier you establish a viable position, the earlier you may be able to resolve matters. Once the ATO crystallises their views on a taxpayer's liability it will become more difficult to convince them of your position. The ATO, generally, does not resolve disputes commercially. They seek to apply and enforce the law related to tax administration and enforcement. What this does is create opportunities for clients who are willing and able to present the ATO with a principled outcome that applies the law in a fashion the ATO can justify and accept.

No matter at what stage of a dispute you engage with the ATO, something can always be done.

For example, where the ATO has issued an amended assessment, the taxpayer will be liable for general interest charge (GIC) until the liability is paid. If you either negotiate to pay this liability in full or come to an appropriate payment arrangement to pay it off over a period of time, clients may often be successful in seeking to either remit the GIC or have it reduced. For long running disputes, this may often deal with a large chunk of the tax liability at issue.

It is never too early to seek professional assistance. Rather than only going to a lawyer when before the Administrative Appeals Tribunal or Courts, you may be able to get a more ordered outcome if you get advice and assistance early. Our advice is always to look at ways to bring ATO disputes to a head as soon as possible and get the parties dealing with the 'real issues'.