Independent ATO Reviews For Small Business Disputes

Independent ATO Review For Small Businesses - 18 July 2018

Independent ATO Reviews For Small Business Disputes

The ATO has started a 12 month pilot program for independent ATO review for small business disputes in response to the recent negative media attention the ATO has received.

While the pilot only encompasses income tax audits in two States (Victoria and South Australia), the ATO will have the option to expand the program to all areas of tax and businesses depending on the pilot’s success.

In response to the media attention around the ATO’s alleged harsh treatment of small businesses, the ATO has responded by extending its independent review function regarding tax disputes to certain small businesses via a pilot program from 1 July 2018. Prior to the pilot program, the opportunity for such a review only applied to companies with an annual turnover of more than $250m.

The idea of the pilot program was first floated by the Commissioner of Taxation at a Senate Estimates hearing as a means of restoring confidence in the tax system and the ATO.

“With the intention over time that businesses, regardless of size, have access and rights to a fit-for-purpose review prior to finalisation of audit”.

The pilot only concerns disputes involving income tax audits and will not consider GST, superannuation, FBT, fraud and evasion findings, and penalties and interest. It will also not apply to small businesses that do not consent to extend the amendment period to allow the review to take place, or in cases where the relevant notice of assessment or amended assessment has already been issued.

Eligible small businesses with an audit in progress in the participating States will be contacted directly by their case officer and offered the opportunity to participate in the pilot. An offer of independent review will also be included in any audit finalisation letter issued if the small business is eligible. If your small business would like to take up the offer of an independent review, you will need to email the ATO within 30 days of the date of the audit finalisation letter, and clearly outline the specific issues you dispute from the audit decision.

Once your request has been submitted, an officer from the ATO Review and Dispute Resolution area will contact you to discuss your request and other options available to resolve the issues raised. Should you decide to proceed with the independent review, it will be conducted by an officer from the Review and Dispute Resolution area that has not had any involvement in your audit. They will consider the documents setting out both parties’ positions and schedule a case conference with the audit officer and yourself within a month of receiving your review request.

The conference will allow all parties to assist the reviewer in understanding the facts and contentions. The reviewer will then consider the positions of each party and prepare recommendations as to the outcome. The outcome will be communicated to both the taxpayer and the audit officer, and the audit team will finalise the audit according to the independent reviewer’s recommendations.

Want To Know More?

If you run an eligible small business and would like to participate in the pilot, we can help you prepare an outline of specific issues disputed from the audit decision and guide you through the process. We can also help you review the other options available to you to see whether they may suit your business better. Contact us today.

18 July 2018

Disclaimer: The information on this page is for general information purposes only and is not specific to any particular person or situation. There are many factors that may affect your particular circumstances. We advise that you contact Mathews Tax Lawyers before making any decisions.

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