The Inspector-General of Taxation and Taxation Ombudsman (IGTO), Ms Karen Payne, has today announced three new review investigations that her office 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. 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,’ Ms Payne said.
A brief summary of the three review investigations is set out below.
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. 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.
The investigation will focus mainly on the timeliness in issuing objection decisions, the independence of objection decision makers and the objection decision making process, as well as the interaction between objections processes and other initiatives in minimising or narrowing disputes.
A number of pieces of legislation specifically provide that the Commissioner of Taxation shall have general administration 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’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 to understand how broad-based GPA decisions (i.e., those affecting large groups of taxpayers) are identified and determined.
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.
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.
Importantly there are limited avenues to challenge the exercise of either the GPA or the CRP.
‘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.’
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.
For further information – Contact
Marjorie Johnston – Wordmakers
Mobile: 0407 329 430
About the IGTO
The Inspector-General of Taxation and Taxation Ombudsman (IGTO) is an independent, Commonwealth statutory agency, established in 2003. The Taxation Ombudsman function was transferred to the IGTO in 2015. The IGTO provides an important safety net service in the tax system. Independent investigation of taxpayer complaints enhances community confidence in the fairness of the tax system and provides assurance to taxpayers in the fairness of their outcomes. This helps to enhance voluntary compliance. The IGTO also provides independent advice and assurance to Government on the taxation administration laws and systems. Since 2015, the IGTO has performed dual roles, which complement each other:
- The Taxation Ombudsman provides independent assistance and assurance directly to taxpayers and tax professionals and investigates taxation complaints about the actions and decisions of the Australian Taxation Office (ATO) or the Tax Practitioners Board (TPB). The Taxation Ombudsman, also conducts investigations of actions that have broader community impact or are commonly observed in a number of complaints to identify wider system improvements that address the causal issues.
- The Inspector-General of Taxation undertakes investigations of actions, systems and taxation laws (to the extent they deal with tax administration matters).