As a matter of administrative practice, the ATO is often willing to grant taxpayers an opportunity to resolve matters speedily without the activation of a formal objection procedure. This is especially so in cases where the taxpayer thinks there is a genuine mistake and is permitted to contact the ATO to attempt to correct it, without prejudicing the taxpayer’s entitlement to the formal objection procedure should such an avenue not lead to the resolution of the matter in dispute. However, the objection procedure remains the most reliable route if the taxpayer is interested in making a formal appeal in case of disagreement with the ATO.
The initial step in appealing a tax assessment is usually for the taxpayer to lodge an objection against the assessment with the Commissioner. The objection application must be in writing, either in the form of a letter or a prescribed form provided by the ATO for this purpose, and must contain all the relevant information needed for the objection to be considered, including in particular:
- The taxpayer’s full details and identification, including tax file number (TFN) or Australian business number (ABN);
- The decision being objected to, including the relevant year or tax period;
- Reasons for objecting to the decision, including, if necessary, the relevant provisions of the law, as well as the rulings and cases being relied upon;
- Any supporting documents or information relating to the decision being challenged;
- A declaration that the information provided in the objection and supporting documentation is true and correct; and
- Signature and date of the objection notice.
On 5 July 2022, the ATO published a guidance on the decisions that taxpayers can object to, along with the time limits and extension of time limits for filing the objection application. The application must be lodged within the prescribed time limit, which, in the case of companies, is usually within 4 years from the date of the service of the notice of assessment by the Commissioner. For amended assessments, the time limit for filing objections is either 60 days after service of the notice of amended assessment or 4 years from the date of the service of the original assessment order, whichever is later. In either case, the taxpayer may request an extension of the time limit at the time of lodging a delayed objection, which may be granted if the Commissioner is satisfied that there are good grounds for the delay.
Apart from filing an objection notice, a taxpayer may also request a review of the decision of the tax office by the Administrative Appeals Tribunal (AAT).
Tax debts are due and payable on the prescribed date regardless of the taxpayer’s decision to pursue the option of formally objecting to an assessment. However, taxes that turn out to have been overpaid following the finalization of the appeal procedure (see below) are refundable, along with accrued interest on the refundable amount.
The taxpayer may appeal against the objection decision before the AAT or the Federal Court, and usually has within 60 days from the date of receipt of the notice of the objection decision to do so. Claims involving an amount less than AUD 5,000 may be submitted to the Small Taxation Claims Tribunal (STCT). The onus of showing the wrongness of any assessment before the Tribunal or Court lies with the taxpayer, and must be established on a balance of probabilities for the appeal to be successful.
Taxpayers also have the option of approaching the Ombudsman with complaints regarding the manner in which the tax law has been applied in relation to them. However, the Ombudsman’s role is confined only to a review of the processes of tax administration with the view to making recommendations for appropriate changes, and any action taken by the Ombudsman, therefore, does not involve specific measures concerning the taxpayer.
The Commissioner is prepared to grant an extension of time within which to pay tax in dispute on demonstration by the taxpayer that payment of the full amount would cause financial hardship, or the Commissioner considers the objection or dispute to be genuine or raise arguable questions of law or fact. In such cases, the due date for payment may be extended to 14 days after the date on which the appeal is decided, provided the full amount, not in dispute is paid, together with 50% of the amount in dispute.