1. Objections, Appeals and Reviews
Chapter 27
Objections, Appeals and Reviews
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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