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Australia’s tax ombudsman has launched three new investigations across 2022, including one into how the ATO administers and manages public objections.
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IGTO to review ATO objections process
13 December 2021
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The Inspector-General of Taxation and Taxation Ombudsman (IGTO), has announced three new review investigations will be progressing throughout 2022.
“Review investigations are one of our core functions and provide in-depth analysis on key areas of tax administration to provide assurance that tax administration systems are operating fairly, equitably and transparently,” Inspector-General of Taxation and Tax Ombudsman, Karen Payne said.
“They provide an opportunity to make recommendations for improvement where appropriate and complement our taxation complaint investigation work and other research and investigation work undertaken by the IGTO.”
The investigations will see the IGTO review the ATO’s administration and management of objections.
“Objections are a critical feature of Australia’s tax dispute resolution landscape as they provide taxpayers with a statutory right to challenge ATO decisions and views,” the IGTO said.
“Taxpayers who lodge objections because they are dissatisfied with a decision that the ATO has made about them or their affairs generally expect their objection to be properly considered and to be finalised in a timely manner, impartially and independent of the original decision maker.”
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The investigation will focus mainly on the timeliness in issuing objection decisions, the independence of objection decision-makers and the objection decision-making process. It will also focus on the interaction between objections processes and other initiatives in minimising or narrowing disputes.
The exercise of the general powers of administration (GPA) will also be reviewed.
The IGTO noted that a number of pieces of legislation specifically provide that the Commissioner of Taxation shall have general administration of the relevant Act (commonly referred to as the general power of administration, or GPA).
These provisions only grant the Commissioner discretion in relation to the administration of provisions set out in the respective Acts.
“It is arguable that any administrative decision made by the Commissioner (or a delegate, or duly authorised officer) that is not a decision under a specific legislative power is an exercise of the GPA. In this sense, the scope and breadth of the GPA is extremely broad,” the IGTO explained.
“The IGTO’s investigation does not propose to examine every type of decision that may be made under the GPA, but will draw from case studies in our complaints investigation service as well as stakeholder submissions to identify and investigate particular areas raised as examples of exercise of the GPA that should be investigated.
“In particular, the IGTO is interested in understanding how broad-based GPA decisions (i.e., those affecting large groups of taxpayers) are identified and determined.”
The IGTO will also look at the exercise of the Commissioner’s remedial powers (CRP).
As the Commissioner of Taxation has a statutory discretion to modify the operation of certain provisions in the tax law where those provisions are not operating as intended, the discretion is only able to be exercised where certain conditions have been met, according to the ombudsman.
“Through the IGTO’s tax complaint investigation service, it has been observed that there appears to be a lack of clarity about how issues are raised for CRP consideration and whether the processes underlying consideration of these matters are sufficiently robust to take into account consideration of relevant factors and expert stakeholder views,” the IGTO explained.
“Importantly there are limited avenues to challenge the exercise of either the GPA or the CRP.”
Ms Payne encouraged taxpayers and practitioners to engage with the investigation that will run over the coming year.
“We welcome stakeholder feedback on all of the review investigations being undertaken and I encourage all interested taxpayers, tax practitioners and members of the community to engage with my office and lodge submissions to share your insights, experience and suggestions for improvement,” Ms Payne added.
The full terms of reference for all three review investigations, together with information on how to lodge a submission, are available on the IGTO website.
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