1 Introduction 2 2 Consequence of possible remedies 2 3 Is Inspector General of Taxation or the Tax Ombudsman helpful? 4 4 Does Administrative Decisions (Judicial Review) Act 1997 or s 75 of the Commonwealth of Australia Constitution Act or s 39B of the Judiciary Act 1903 provide routes? 4 5 Conclusion 6 6 References 7
The essay is about the case of an individual taxpayer. ATO has decided audit her even if she has a record of adequate tax returns as well as a reputable tax agent to ensure such adequacy. ATO claims that the taxpayer has always reported dividend income only from managed funds, but no net capital gain or loss. However her living expense has been over her declared income and for this ATO has issued notice in terms of s263 and carried out a thorough search on her property in the absence of the taxpayer herself and they also made copies of all the hard drives.
Now ATO has issued an amended assessment for which both the taxpayer and the tax agent are highly dissatisfied. This essay will focus on the remedies that might be available to the taxpayer as there are some rights, according to the law, to the taxpayers to object any action of ATO.
Consequence of possible remedies
The taxpayer’s agent claims that the steps taken by ATO is not eligible for applying for review by the Administrative Appeals Tribunal or an appeal to the Federal Court, in both cases under Part IVC of the Taxation Administration Act 1953. I do not agree with this claim, because the law states that a taxpayer has the right to consider the objection process when following matters arise (ATO n.d.)- * If the taxpayer disagree with the ATO interpreted the law. For example- amended assessment. * If taxpayer is not certain about his-her interpretation of the law. For example- confusion about inclusion of any item in the tax return. * If taxpayer wants the option to ask for external review when ATO does not agree with the taxpayer.
The law also states that a taxpayer can object to certain amendments or decisions regarding following issues (ATO n.d.)- * Australian business number * Excise * Fringe benefits tax * Fuel schemes * Fuel tax credit * Goods and service tax * Income tax * Luxury car tax * Penalties and interest * Superannuation * Wine equalization tax
The individual tax payer in this case has the right to object the amendment assessment issues by ATO because she disagrees with the decision and the matter that the assessment is related to is the income tax of the taxpayer, therefore, she is also entitled to such objection.
The most fundamental right of the taxpayers is the right to appeal against a tax assessment. There are two judicial avenues for taxpayers to appeal against a taxation decision-one is to the Federal Court or the Administrative Appeals Tribunal (Wheelwright 1997).
In case of amended assessment the taxpayer’s right to appeal is limited to the portion altered or added to the original assessment notice. The taxpayer cannot raise objection to the unaltered portion of the assessment.
Alternative Dispute Resolution is another way for the aggrieved taxpayer to resolve the dispute. Because by the general observation the following are the matters where ADR may be appropriate- * Issues that are eligible to be negotiated * ATO has something to give * Taxpayer or other party has something to give * The dispute is capable of being settled within existing settlement policies and practices * Settlement must be preferable to judicial determination.
There is a possibility that the taxpayer’s appeal against the amended assessment will be cancelled, therefore, alternative dispute resolution can be another venue for untie this dispute. ATO in many cases supports ADR to encourage early settlement of disagreement. It is a cost effective, informal, efficient and prompt way of solving problems. It