A.3.1 The following information is a summary of information extracted from the ATO's intranet and is referred to in Chapter 5, in particular, Action Item 16.

A.3.2 The ATO's intranet contains a series of pages for each business line outlining the circumstances in which ATO officers are expected to use the facts and evidence worksheet.

ATO Aggressive Tax Planning business line

A.3.3 Of the thirteen aggressive tax planning (ATP) 'products' outlined, three require the use of the facts and evidence worksheet. These products are:

  • Income Tax Participant Scheme Position Audit;
  • High Risk Participant Audit; and
  • Promoter Audit.

A.3.4 The remaining products require either the use of the 'ATP Evidence Matrix' or the 'facts tab' in the Siebel case management system.

ATO indirect Tax business line

A.3.5 For the Indirect Tax (ITX) business line, the following cases for each business area must use the facts and evidence worksheet:

Business area When to use
Serious Evasion all audit cases

review cases where there is a high risk of dispute.

Large Market all audit cases

review cases where there is a high risk of dispute.

Small Medium Enterprise (SME) cases where there is a high risk of dispute

highly recommended for significant cases.

Micro Enterprise cases where there is a high risk of dispute

highly recommended for significant cases.

Refund Integrity Branch not required to be used.

A.3.6 The ATO's intranet page for ITX describes 'significant cases' as including:

  • The four year rule will have an impact on this case — section 105.50 of Schedule 1 to the Taxation Administration Act 1953 (TAA) and section 105.55 of Schedule 1 to the TAA.
  • An issue has been, or is likely to be referred to a Centre of Expertise for advice (not necessarily a priority technical issue).
  • The case or issue has the potential to adversely impact on ATO reputation or the case/issue is likely to be politically or media sensitive.
  • The case is an aged case which has exceeded the cycle time by 250 days or more.
  • The case has market or industry impacts, that is, the issue will affect other players in a particular market.
  • A 'revenue at risk case', that is, potential taxpayer flight risk or strategic Debt involvement.
  • Aggressive Tax Planning case.
  • The matter involves significant reputation risk for the client — the client is challenging the ATO view and/or litigation is likely.
  • Prosecution is likely.
  • The case has Legal Professional Privilege (LPP) and/or accountant's concession issues.
  • The ATO is approached to settle the matter.

A.3.7 The published excel version of the ITX active compliance facts and evidence worksheet is the only worksheet authorised for use in ITX active compliance.

ATO Tax Practitioner and Lodgment Strategy business line

A.3.8 The Tax Practitioner and Lodgment Strategy (TPALS) business line states that the ITX practice note is to be applied in respect of cash economy audits.

ATO Large Business and International business line

A.3.9 For the then Large Business and International (LB&I) business line, the facts and evidence worksheet must be used for all audit cases after 1 February 2011. The facts and evidence worksheet is not mandatory for all audit cases commenced prior to 1 February 2011 however, it must be completed by auditors for those cases where there is a reasonable likelihood of an objection. Objection cases that proceed to litigation require the worksheet to be completed as part of the Legal Services Branch (LSB) referral process. The LB&I business line also uses the Law & Practice (L&P) worksheet templates in such referrals.

ATO Micro Enterprises and Individuals business line

A.3.10 In the Micro Enterprises and Individuals (ME&I) business line, active compliance case officers must consult their team and technical leaders for specific guidance on when to use the facts and evidence worksheets.

A.3.11 The ME&I executive have 'endorsed' the completion of the facts and evidence worksheet for the following active compliance low volume cases:

  • cases likely to go to prosecution;
  • international compliance comprehensive audit cases;
  • wealthy Australians comprehensive audit cases;
  • cases involving the use of fraud or evasion;
  • more contentious comprehensive audits where there is a high risk of dispute or litigation.

A.3.12 The use of the facts and evidence worksheet is to be considered on a case-by-case basis.

A.3.13 The ME&I business line uses the L&P business line worksheet templates.

ATO Superannuation business line

A.3.14 For the Superannuation business line, the facts and evidence worksheet the facts and evidence worksheet template 'should be commenced' at the earliest opportunity when it becomes clear the decision/s intended to be made:

  • make a reviewable decision that is supported by a position paper, e.g. penalty imposition and remission;
  • status of worker; and
  • issuing a notice of non-compliance or disqualification of an individual etc.

ATO Small and Medium Enterprises business line

A.3.15 For the Small and Medium Enterprises (SME) business line, the use of the facts and evidence worksheet is mandated for:

  • all audit cases;
  • matters likely to go to litigation, where one or more of the following features are exhibited:
    • the taxpayer and/or their advisor has indicated to the ATO a litigious inclination either during the audit or objection process, or during settlement discussions. Such an indication may be verbal.
    • the tax law at issue is contentious or unsettled.
  • any other contentious cases where one or more of the following features are exhibited:
    • matters that are within the Issues to be reviewed by the SME Technical Panel;
    • matters that are within the SME Case Leadership referral guidelines;
    • matters that involve the advice of Tax Counsel Network (TCN) and/ or Centre of Expertise;
    • matters where Part IVA123 is in contemplation;
    • matters involving complex tax law issues;
    • matters involving little primary documentary evidence, concealment of income (including foreign income);
    • Section 167 assessments.124 The worksheet will assist with identifying evidentiary gaps to determine whether an section 167 assessment is sustainable. However it is recognised and acknowledged that the level of facts and evidence available to support an s167 assessment will often be less than in other audit cases;
    • matters involving the use of fraud or evasion to amend;
    • matters that are likely to result in referral to Serious Non-Compliance;
    • the matter is a priority technical issue that has been endorsed by the SME Technical Panel, and has a TCN attached and an SME SES sponsor;
    • matters involving potential reputation risk and/or media attention, public scrutiny;
    • matters where the penalties in contemplation are either recklessness or intentional disregard of the law.

A.3.16 The SME business line uses its own facts and evidence worksheet templates.

ATO Serious Non-compliance business line

A.3.17 For the Serious Non-compliance (SNC) business line, only auditors that have completed the facts and evidence training should complete the worksheet. The SNC business line maintains its own worksheet template. The 'SNC Tech Alert' containing this information is relatively old — there may be updated work processes.


123 Income Tax Assessment Act 1936 Pt IVA.

124 Income Tax Assessment Act 1936 s 167.