1.1 This is the report on the review conducted by the Inspector-General of Taxation (Inspector-General or IGT) of aspects of the Australian Taxation Office's (Tax Office or ATO) administration of private binding rulings. This report is made under Section 10 of the Inspector-General of Taxation Act 2003 (IGT Act).

1.2 The review was announced on 6 April 2009. Its terms of reference are reproduced in Appendix 1 to this report. Details of how the review was conducted are also given in Appendix 1.

1.3 The decision to undertake the review was prompted by concerns raised with the IGT by industry and tax practitioners and also by a specific request from the Commissioner of Taxation to review the private rulings system.

1.4 A number of key recommendations arose from the review. These are listed and summarised in the Overview at Chapter 2.

1.5 The ATO's private ruling administrative processes and the register of private binding rulings are dealt with in Chapter 3 and 4 respectively.

1.6 Chapter 5 discusses the extent to which the ATO has implemented the recommendations of the IGT's previous 2008 review on revenue bias in private rulings.

1.7 During the course of the IGT's review, the ATO made or proposed a number of changes to its processes for private rulings. Some of those changes directly addressed concerns raised with the IGT. All changes made or proposed by the ATO are noted in this report wherever relevant.

1.8 The Commissioner of Taxation's response to the review is in Appendix 2. The Commissioner's detailed comments on each recommendation of the report are set out immediately below the recommendations set out in chapters 3 and 4.