New South Wales
OBJECTIONS & APPEALS
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The legislation applies penalties for various offences in relation to the payment of tax.
For instance, you may be liable to penalty if:
There are also penalties for inadequate disclosure. This is increasingly important given the emphasis by the ATO on self assessment by the taxpayer.
Objection time limits
There are different time limits to object to an assessment by the ATO, depending on the issue and the discretion of the ATO.
In some circumstances you will have a number of years to object to an assessment; in others it can be as little as 60 days. Check with your tax agent as soon as you receive the assessment.
What to include
It is a good idea to get professional advice if you have a substantial objection to a tax assessment. One reason for this is that a professional (e.g. a tax agent) will know how to write the objection, and how to describe the objection. For instance, it is important to give details of the objection beyond the fact that you believe the assessment was excessive etc. You may also be bound by the way you have described your objection should the issue come before a Court or Tribunal - it is important to get it right the first time.
First, you should receive an acknowledgment of your objection - the actual review may take some time. If you have not received an acknowledgment get in touch with the ATO to confirm that your objection has been received. Remember, there are time limits that apply.
Your objection will be looked at by the ATO. If the objection is rejected (or no decision is made within a specified time) you can look at legal remedies. These include:
Make sure you get legal advice about this. There are court fees and, of course, legal costs.
The AAT is not bound by the strict rules of evidence. Although it is possible to appear at the AAT without a lawyer, it is worth remembering that for the ATO the issues that are raised will be commonplace, and this represents an advantage for them.
The Small Tax Claims Tribunal is part of the AAT. It has less formal proceedings for smaller sums that are in dispute.
Note that these judicial bodies are independent of the ATO.
The Commonwealth Ombudsman has a taxation section that deals with complaints about the ATO. However, the Ombudsman cannot reverse a decision made by the ATO about assessments. It will look at the way the ATO has dealt with an issue and can make recommendations.
Payment of tax
Just because you have lodged an objection or review/appeal to an assessment it does not mean you do not have to pay the disputed sum whilst the objection is being resolved. It is worth getting professional advice to ensure that the ATO does not start to recover the disputed payments until the objection or review/appeal is decided. You may have to make a part payment.
Freedom of information
The ATO is subject to freedom of information legislation, which means that taxpayers are able to view their tax files.
Applications for access to tax files must be made in writing and include enough information to identify your file. You should get in touch with the ATO in your State/Territory to make the process as easy as possible. It is also possible to ask for an internal review if the ATO refuses to provide the documentation you request.
The ATO has significant powers to obtain financial information from taxpayers. This a complex area of law, especially in relation to the right of entry, and it is important that you get professional advice if you are investigated.
Since the primary responsibility for assessment belongs to the taxpayer, there are random checks made by the ATO. These are sometimes so-called "desk audits". This may involve a visit to the ATO, together with records that will be used to substantiate claims.
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