ATO Alternative Dispute Resolution

Resolving Your ATO Dispute Using Alternative Dispute Resolution

ATO Alternative Dispute Resolution

Alternative dispute resolution (ADR) is not only used to resolve substantive disputes with the ATO.

It can also be used to clarify or limit issues and remove barriers created by relationship issues between you and the ATO. Usually, if your dispute is not very complex, ATO in-house facilitation may be used. More complex issues will usually be outsourced by the ATO to an external practitioner. Working out if an ADR process is right for you can save you time, money and heartache in any dispute or potential dispute with the ATO.

If you’re involved in a dispute with the ATO, going straight to the Federal Court or Administrative Appeals Tribunal (AAT) may not be the most time or cost-effective way to proceed. As a taxpayer, you can access ADR processes in any dispute with the ATO. Used appropriately, ADR may be the most cost-effective and efficient way to resolve disputes with the ATO. Basically, ADR involves using an impartial person to help resolve the dispute or at least narrow the issues in dispute between the parties.

Broadly, ADR processes encompass 4 branches: facilitative, advisory, determinative, and blended dispute resolution.


In this branch, independent ADR practitioners assist the parties to identify the issues, formulate solutions, and consider any alternatives with the goal of reaching an agreement either about the entire dispute or some issues within the dispute. Examples of facilitative processes include:

  • Mediation – an external practitioner is engaged to facilitate the process. The parties usually split the costs involved where mediation is voluntarily entered into. Note that mediators do not normally give advice, unless the parties have requested an advisory/evaluative mediation or conciliation.
  • In-house facilitation – a trained independent ATO officer facilitates the process. There are no costs involved. However, the facilitator will not establish facts, give advice, or decide on who is “right or wrong”. The facilitator’s function is to guide the parties through the process and assist them to ensure there are open lines of communication and that messages are correctly received.


This process may also be referred to as neutral evaluation (or early neutral evaluation) and involves the parties presenting their arguments to an independent practitioner who provides advice on some or all of the facts of the dispute, the law, and possible or beneficial outcomes.

In tax and superannuation disputes, the practitioner will usually have substantial experience in tax law so they can give an insight into a decision a Court or the AAT may make if the dispute proceeds to litigation. Once the practitioner gives their advice, it is up to each party whether they accept the advice and how they will use it. For example, if both parties hear from the independent practitioner that they will not be completely successful in their case before the AAT or Court, they may decide to enter into a negotiated settlement to resolve the dispute rather than going through costly legal proceedings.


In this process, an independent practitioner evaluates the dispute and makes a determination, such as with arbitration. However, the ATO notes that determinative processes are not generally appropriate for ATO disputes as they can incur similar costs and delays as litigation, but lack the openness and transparency of Court of AAT decisions.

Blended Dispute Resolution

This is where an independent practitioner plays multiple roles such as conciliation and conferencing, and may also facilitate discussions and provide advice on the merits of the dispute. The facilitator will usually have qualifications in the area of the dispute. This process is usually used by the AAT in tax and superannuation disputes in the early stages of the proceedings.

I Have A Dispute With The ATO, What Should I Do?

Certainly, in any dispute or potential dispute with the ATO, emotions will be running high and rash decisions may sometimes be made. It’s important to keep a cool head to work out which ADR option best suits your circumstances to save you time, money, and heartache. If you’re in a dispute with the ATO, or facing a potential dispute and you’re not sure which ADR process is right for you, we can help you work out your best option to resolve your dispute. Contact us now for assistance.

14 August 2018

For expert advice and assistance in dealing with your Tax Disputes in Australia, please contact Mathews Tax Lawyers on 1800 685 829

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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