Review of Tax Office Management of Part IVC litigation

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Appendix 6: Further information regarding the extent of tax litigation

A.6.1 This appendix first provides a summary of the finalisation of applications for review of Tax Office decisions in the Taxation Division of the Administrative Appeals Tribunal over an eight year period. The appendix also provides a comparison between the General and Veterans Division and Taxation Division within the Administrative Appeals Tribunal with respect to the finalisation of applications for review by way of consent and hearing.

A.6.2 In this appendix, the terms used are defined as follows:

• ‘Affirmed’ indicates that the Tribunal has affirmed a decision under review. This means that the original Tax Office decision still stands.
• ‘Dismissed/Withdrawn’ indicates that an application by a taxpayer has been dismissed by the Tribunal without proceeding to review the decision. An application may be dismissed, for example, by consent, or if the applicant fails to appear, or if the Tribunal is satisfied that the application is frivolous or vexatious.
• ‘Remitted’ indicates that the Tribunal has set aside the Tax Office decision and sent it back (remitted it) to the original decision maker to be reconsidered in accordance with any directions or recommendations of the Tribunal.
• ‘Set Aside’ indicates that the Tribunal has set aside a decision under review. The effect is that the Tribunal disagrees with the original Tax Office decision and makes a new decision.
• ‘Varied’ indicates that the Tribunal has varied a decision under review. This means that the Tribunal changes or alters the original Tax Office decision.

A.6.3 Chart 1 outlines the resolution of application of review cases by way of resolution type. Percentages are based on eight year averages obtained from Administrative Appeal Tribunal Annual Reports.

Chart 1: Total applications for review of a Tax Office decision to the Taxation Division of the Administrative Appeals Tribunal

A.6.4 The following four tables provide a comparison between the General and Veterans Division and Taxation Division within the Administrative Appeals Tribunal with respect to the finalisation of applications for review by way of consent and hearing.

By consent

General and Veterans Division

	1997/98	1998/99	1999/00	2000/01	2001/02	2002/03	2003/04	2004/05	Mean	Median
Affirmed (%)	3	3	4	5	5	7	7	8	5.25	5
Dismissed/ Withdrawn(1)	35	31	31	27	30	30	33	34	31.375	31
Set Aside	26	28	26	25	27	25	26	27	26.25	26
Varied	7	9	10	10	10	7	6	5	8	8

Taxation Division

	1997/98	1998/99	1999/00	2000/01	2001/02	2002/03	2003/04	2004/05	Mean	Median
Affirmed (%)	1	2	1	2	<1	<1	1	10	2.125	1
Dismissed/ Withdrawn	29	34	17	20	37	7	7	16	20.875	18.5
Set Aside	20	22	19	16	25	56	57	25	30	23.5
Varied	22	16	42	40	14	32	28	23	27.125	25.5

By hearing

General and Veterans Division

	1997/98	1998/99	1999/00	2000/01	2001/02	2002/03	2003/04	2004/05	Mean	Median
Affirmed (%)	12	13	13	15	11	14	16	14	13.5	13.5
Dismissed	3	3	3	4	2	3	2	2	2.75	3
No jurisdiction	1	1	1	<1	1	1	<1	<1	0.625	1
Set Aside	8	8	8	8	9	9	7	6	7.875	8
Varied	1	1	1	2	1	1	<1	1	1	1

(1) Includes matters dismissed under subsections 42A(1) and (1B) of the AAT Act and otherwise by operation of law.

(2) Includes matters dismissed under subsections 42A(2) (non appearance), 42A(4) (failure to show reviewable decision), 42A(5) (failure to comply with a direction of the Tribunal) and 42B(1) (frivolous or vexatious) of the AAT Act.

Taxation Division

	1997/98	1998/99	1999/00	2000/01	2001/02	2002/03	2003/04	2004/05	Mean	Median
Affirmed (%)	11	6	4	7	3	2	1	10	5.5	5
Dismissed	6	4	1	8	7	0	2	4	4	4
No jurisdiction	1	2	3	<1	1	<1	1	<1	1	1
Set Aside	3	4	3	2	2	<1	<1	5	2.375	2.5
Varied	<1	2	1	2	4	<1	<1	2	1.375	1.5

A.6.5 The following table provides information obtained from Administrative Appeal Tribunal Annual Reports regarding the number of applications for review finalised by hearing in the Taxation Division.

Number of applications for review finalised by hearing in the Taxation Division

	1997/ 98	1998/ 99	1999/ 00	2000/01	2001/02	2002/03	2003/04	2004/05	Average percentage of applications finalised by resolution type
Affirmed	79	42	37	70	28	66	40	144	35.9
Set Aside	18	30	28	22	16	34	25	79	18.1
Varied	1	15	5	18	34	19	10	28	9.6
Remitted	7	3	7	1	0	5	0	4	2.3
Dismissed/ Withdrawn	40	26	11	76	58	15	62	66	25.4
No jurisdiction	4	13	22	2	10	9	34	10	8.7
Totals	149	129	110	189	146	148	171	331

A.6.6 The following four tables provide information obtained from the Tax Office regarding the finalisation of tax litigation in 2003/04.

Non-ATP Part IVC Litigation

Jurisdiction	Favourable to the Tax Office	Adverse to the Tax Office	Partially Favourable	Total
Small Taxation Claims Tribunal	15	0	3	18
Administrative Appeals Tribunal	36	7	12	55
Federal Court	17	5	1	23
Full Federal Court	4	3	3	10
High Court	3	1	0	4
Total	133	32	20	185

ATP Part IVC Litigation

Jurisdiction	Favourable to the Tax Office	Adverse to the Tax Office	Partially Favourable	Total
Small Taxation Claims Tribunal	0	0	0	0
Administrative Appeals Tribunal	0	1	0	1
Federal Court	4	1	0	5
Full Federal Court	2	0	0	2
High Court	0	0	0	0
Total	6	2	0	8

Part IVC Litigation — Courts

Jurisdiction	Favourable to the Tax Office	Adverse to the Tax Office	Partially Favourable	Total
Federal Court	21	6	1	28
Full Federal Court	6	3	3	12
High Court	3	1	0	4
Total	30	10	4	44

Part IVC Litigation — Tribunals

Jurisdiction	Favourable to the Tax Office	Adverse to the Tax Office	Partially Favourable	Total
Small Taxation Claims Tribunal	15	0	3	18
Administrative Appeals Tribunal	36	8	12	56
Total	51	8	15	74

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