A report to the Assistant Treasurer
Telephone: (02) 8239 2111
Facsimile: (02) 8239 2100
Level 19, 50 Bridge Street
Sydney NSW 2000
GPO Box 551
Sydney NSW 2001
17 July 2014
Senator the Hon Mathias Cormann
Acting Assistant Treasurer
Canberra ACT 2600
Follow up review into delayed or changed Australian Taxation Office (ATO) views on significant issues
I am pleased to present you with my report of the above follow up review. The primary purpose of this review was to examine the ATO's implementation of agreed recommendations in my previous Review into delayed or changed ATO views on significant issues (the so-called 'U-turns' review).
Overall, I have found that the ATO has implemented three out of four agreed recommendations and has partly implemented the other. The latter concerned the ATO's management of 'U-turns' in audits which was one of the main concerns raised by stakeholders in this follow up review.
The management of 'U-turns' in audits was also considered by the Full Federal Court in a case which was decided during the course of the review. This case raised some doubts regarding the ATO's ability to manage 'U-turns' administratively and the level of certainty provided by ATO practice statements more generally.
To alleviate the above concerns, I have made two new recommendations with which the ATO has agreed. There is a residual concern that legislative change may still be required to fully address 'U-turn' issues. However, I believe such a solution should only be pursued if issues continue to arise after the two new recommendations have been implemented.
I offer my thanks for the support and contribution of professional bodies, tax practitioners and taxpayers. I would also like to thank ATO officers for their professional cooperation and assistance in this review.
Inspector-General of Taxation
© Commonwealth of Australia 2014
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