Using the ATO independent review process to resolve your tax dispute
ATO independent review service
If you’re a small business, you now have another way to try and resolve your tax dispute with the ATO – the independent review service has now become a permanent feature. An ATO officer from a different part of the ATO that was not involved in the original audit will review your file. This review can be requested by an eligible small business if they disagree with some or all of an audit position.
It is important to note that the areas of superannuation, FBT, fraud and evasion finding, and interest are not covered under the independent review service.
Background to the ATO independent review service
Small businesses now have another pathway to resolve tax disputes with the ATO making its independent review service a permanent option for eligible small businesses (i.e. those with a turnover of less than $10m). The service was initially conceived as an avenue for small businesses to obtain early and fair resolution in relation to audit positions.
The original pilot commenced in 2018 and centered around income tax audits in Victoria and South Australia which was later expanded in 2020 to include all other States and Territories along with other areas of tax including GST, excise, luxury car tax, wine equalisation tax, and fuel tax credits. After what the ATO considered to be a successful multi-year pilot, the service has now become a permanent feature.
Small businesses who participated in the pilot found the process to be fair and independent, irrespective of the independent review outcome.
Who can request an ATO independent review?
An independent review can be requested by an eligible small business if they disagree with some or all of an audit position and an offer for an independent review has been made by the ATO. However, the review will not be the first opportunity small businesses have in responding to audit findings. Initial findings will be disclosed in an interim position paper and small businesses are able to raise areas of disagreement before the final audit letter is sent out.
How does the ATO independent review process work?
If your small business is eligible for a review, your ATO audit case officer will contact you and a written offer of independent review will also be included int the audit finalisation letter. If you wish to proceed with the review, you will need to contact the ATO via the relevant email address within 14 days of the date of the audit finalisation letter. The ATO notes that the email must clearly specify and outline each area of disagreement with the audit position.
As a part of the review process, you will also be asked to complete and return a consent form to extend the amendment period (if required) which will allow the ATO to complete the review before the period of review for the relevant assessment ends. According to the ATO, the review cannot be commenced unless the consent form is provided.
Where your small business obtains approval to use the independent review service, an independent reviewer will be allocated to your case and will contact you to discuss the process. Although this process involves an ATO officer, this officer will be from a different part of the ATO and will not have been involved in the original audit.
What can't be reviewed under the independent review process
It is important to note that the areas of superannuation, FBT, fraud and evasion finding, and interest are not covered under the independent review service.
Therefore, if your dispute relates to those areas or if you do not want to pursue the independent review process, other options including lodging an objection or using the ATO in-house facilitation service may be utilised. You can also raise your matter with the Inspector-General of Taxation and Taxation Ombudsman or the Australian Small Business and Family Enterprise Ombudsman.
Have a dispute with the ATO?
If you would like to pursue an independent review, we can help you clearly outline the specific issues disputed as required by the ATO.
We can also help if you would like to pursue the other avenues of dispute resolution including objecting to amended assessments and penalties.
Contact us today for expert help and advice.