Objections, Appeals and Reviews Chapter 27 Objections, Appeals and Reviews © National Core Accounting Publications

© National Core Accounting Publications Objections Any taxpayer who is dissatisfied with their assessment or other taxation decision may object The objection must be: in writing in the approved form and, within the prescribed time limits © National Core Accounting Publications

© National Core Accounting Publications Objections Reasons for objections A taxpayer may wish to object against any of the following: inclusion of an item by the ATO as assessable income disallowance of an item as a deduction disallowance of a tax offset imposition of penalty tax an incorrect calculation of tax © National Core Accounting Publications

© National Core Accounting Publications Objections Content and Format An objection does not have to follow any particular written format (i.e. technical jargon is not necessary) However, it has to contain at least a statement of what the taxpayer is objecting to in the assessment and the reasons for that view © National Core Accounting Publications

© National Core Accounting Publications Objections Cost There is no set fee to lodge an objection Effect Lodging an objection does not defer a taxpayer's liability to pay tax by the due date Time limit 2 years for taxpayers with simple tax affairs © National Core Accounting Publications

© National Core Accounting Publications Objections Outcome of objections Where a taxpayer’s objection is successful, in full, or in part, the ATO will forward an Amended Notice of Assessment which will either decrease tax owing or provide a refund cheque Where an objection is disallowed, the ATO must advise the taxpayer of its decision in writing setting out an explanation of the reasons why the objection was disallowed © National Core Accounting Publications

© National Core Accounting Publications Reviews and Appeals If a taxpayer is dissatisfied with the outcome of an objection, then the taxpayer may within 60 days of being served with the notice of disallowance of the decision either: apply to the Taxation Appeals Division of the Administrative Appeals Tribunal (AAT) for a review of the decision, or appeal to the Federal Court against the decision © National Core Accounting Publications

© National Core Accounting Publications Reviews and Appeals Small Taxation Claims Tribunal (STCT) If the amount of tax payable in dispute is  $5,000, the taxpayer may elect that the matter be dealt with by the STCT The STCT provides a cheaper and less formal means of resolving tax disputes, in particular, by encouraging mediation © National Core Accounting Publications

© National Core Accounting Publications Reviews and Appeals Limitations A taxpayer is generally limited to relying on the grounds stated in the original letter of objection in any appeal or review However, the AAT and Federal Court have the discretion to allow a taxpayer to amend the grounds of an objection, or to even rely on fresh grounds © National Core Accounting Publications

© National Core Accounting Publications Reviews and Appeals Limitations The ATO is generally not limited (i.e. there is no limit to the grounds on which the ATO can rely on to defend an assessment) Also, the onus (burden) of proof in proving that an assessment is excessive or wrong lies upon the taxpayer and not the ATO © National Core Accounting Publications

© National Core Accounting Publications Reviews and Appeals Choice between AAT and Federal Court Some of the factors that a taxpayer should consider in deciding whether to apply to the AAT for a review of, or appeal to the Federal Court against, the ATO’s decision on an objection are: Type of Case Nature of proceedings Publicity Costs Rights of appeal © National Core Accounting Publications

© National Core Accounting Publications Reviews and Appeals Features of the Federal Court legal representation is required the case is heard by a single judge may confirm or vary the ATO's decision or make any order it sees fit © National Core Accounting Publications

© National Core Accounting Publications Reviews and Appeals Features of the AAT taxpayers can present their own case, or they can be represented the AAT is not bound by the rules of evidence proceedings are informal in nature and are closed to the public the matter is usually heard by a single member who can exercise nearly all the powers and discretions of the ATO may set aside, vary or confirm the ATO's decision © National Core Accounting Publications