3.1 Under Australia's tax laws, the ATO is able to issue legally binding written advices (called private rulings) to particular taxpayers on how the ATO considers that the income tax law applies to a particular arrangement. Subject to certain conditions, these private rulings are legally binding on the ATO. This means that if a taxpayer follows the advice in a private ruling that has been issued to them, the ATO cannot levy additional income tax, penalties and interest if that advice is wrong.
3.2 Private rulings are published in an edited form in a register of private binding rulings that is accessible to the public via the ATO's website.
3.3 Private rulings are a part of the ATO's advice and guidance framework. ATO advice is advice that is generally issued in the form of material which binds the Commissioner. Private rulings, public rulings and oral rulings are examples of ATO advice. ATO guidance is not binding on the Commissioner and provides more general information that assists taxpayers in a wide variety of circumstances to deal with their tax obligations. Written guidance provided to a particular taxpayer is an example of ATO guidance. The ATO has stated that if a taxpayer wants binding advice about the applicability of the law to their individual circumstances, they should apply for a private ruling or an oral ruling.4
Previous recent reviews of the private rulings system
3.4 Aspects of the ATO's administration of the private rulings system have been subject to three other major reviews over recent years.
Treasury's RoSA review
3.5 The most far-reaching recent review of the private rulings system was conducted by Treasury in its 2004 Review of Aspects of Income Tax Self Assessment (the RoSA review).
3.6 This review made 54 recommendations, 14 of which related to private rulings. Of these 14 recommendations, 6 were to be addressed administratively and 8 by legislative change. There were 2 recommendations which related to oral rulings, one of which was to be addressed administratively and the other, by legislative change.
3.7 The legislative RoSA recommendations concerning private and oral rulings were implemented via a total re-write of the legislative provisions concerning public, private and oral rulings, which came into effect on 1 January 2006.
3.8 The six recommendations of the RoSA report concerning private rulings and one recommendation concerning oral rulings that were to be addressed administratively have also now been implemented.
3.9 The RoSA legislative and administrative recommendations were aimed at providing greater certainty to taxpayers from the private rulings process. These recommendations involved an expansion of the range of topics on which private rulings could be issued, measures to help the ATO better manage changes to private rulings, measures to improve the timeliness of private rulings, measures to make private rulings more readable and measures to improve confidence in the objectivity of private rulings.
3.10 Of the six RoSA recommendations for private rulings that were to be addressed administratively, one involved the IGT conducting a review of whether the pattern of private rulings indicated a pro-revenue bias. This review was completed in 2008 and is discussed further below.
3.11 The remaining five administrative recommendations for private rulings, all of which have now been implemented, were that the ATO should:
- (where appropriate) use assumptions in private rulings and not consider matters not raised by applicants;
- modify its private ruling application forms and processes to reduce the need for taxpayers to conform to complex procedures or for the ATO to seek additional information from taxpayers;
- write rulings in plain language with a minimum of qualifying statements and, where necessary, provide in addition a more detailed or technical statement of its position;
- include in private rulings, where appropriate, an indication of whether Part IVA has been considered;
- enhance its published performance reporting on private rulings to distinguish response times to individuals and very small businesses from those for larger businesses and separately report agent and non-agent case statistics.
3.12 The administrative recommendation concerning oral rulings which has now been implemented was that the ATO was to explore ways to record oral advice as had been previously suggested by the Ombudsman.
IGT's review of potential revenue bias in private rulings involving large business taxpayers
3.13 On 7 February 2005, the then Minister for Revenue and Assistant Treasurer asked the Inspector-General to review and report on whether there is a 'pro-revenue' bias evident in private binding rulings issued by the Commissioner of Taxation under Part IVAA of Taxation Administration Act 1953. As a result of this request and industry representations to do so, the Inspector-General then conducted a review of the potential revenue bias in private rulings involving large complex matters. This review focussed on private rulings involving large business taxpayers.
3.14 The review found that because of the ATO's dual role as a rulings administrator and a revenue collector it was generally accepted that the ATO would have an inherent revenue bias in finely balanced matters. However, the review found that there was no evidence of undue revenue bias in large complex PBRs.
3.15 Based on a representative survey, however, around 70 per cent of large business PBR applicants perceived the Tax Office to have a revenue bias in its PBRs. A major cause of these perceptions was identified as being a lack of transparency — taxpayers observed unexplained Tax Office behaviours and in the absence of cogent explanations interpreted those behaviours as being motivated by a revenue bias. The Inspector-General made ten recommendations to address this. The Tax Office fully agreed with six of these recommendations and partly agreed with four.
3.16 The ten recommendations suggested improvements in the following areas:
- Tax Office transparency, communication and objectivity — Recommendations 1 to 6 (Recommendations 1 and 2 were partly agreed to by the Tax Office)
- the interactions between the Tax Office and Treasury — Recommendations 7 and 8 (Recommendation 7 was partly agreed to by the Tax Office)
- the time frames for private rulings — Recommendations 9 and 10 (Recommendation 10 was partly agreed to by the Tax Office).
3.17 As a recent initiative, the IGT also conducted a 'follow up review' on the extent to which the original 10 recommendations, referred to above, had been implemented. The Inspector-General's conclusions are included in this report at Chapter 5.
JCPAA Report 410 — June 2008
3.18 In 2008 the Australian Parliament's Joint Committee of Public Accounts and Audit (JCPAA) conducted a review of the ATO's administration of rulings. The report from this review noted that the timeliness of private rulings was the main issue raised in evidence about rulings.
3.19 The JCPAA made two recommendations on this issue.
3.20 The first recommendation was that the ATO should publish in its Annual Report a comparison of its performance in relation to its 28 day service standard for private rulings requests with information on total elapsed time for these applications. (Interestingly, the IGT made this same recommendation in the 2008 revenue bias private rulings report discussed above but on that occasion the ATO only agreed to the recommendation 'in part'. For further discussion refer to the follow up review at Chapter 5.)
3.21 The second recommendation was that the ATO should divide the 'large businesses' category used for its performance reporting of the timeliness of private rulings into 'medium businesses' and 'large businesses'.
3.22 The ATO implemented both these JCPAA recommendations in its 2007/08 Annual Report.
Focus of this review
3.23 This present review by the IGT has been conducted both on his own initiative and in response to a specific request from the Commissioner of Taxation.
3.24 The Commissioner's request was made shortly after community concerns were voiced about a proposal of the Commissioner (which has since been not proceeded with) to remove the detailed content of private rulings from the register of binding private rulings that is currently accessible to the public via the ATO's website. The ATO had planned to streamline this register so that it showed only the subject matter of any private ruling and its authorisation number. The request was also made against the background of a major change that the ATO was about to implement to its computer system for the management of private rulings. Implementation of this major system change occurred after the major fieldwork for this review had been completed.
3.25 Against this background, the terms of reference for this review are broader than those set for the IGT's previous 2008 review of the private rulings system. This previous review focussed on a particular concern (revenue bias) and a particular taxpayer group (that of large businesses). This review focussed on private rulings issued to all types of taxpayers and on a number of identified concerns. It has also examined oral rulings.
3.26 In submissions made to this review, taxpayers and tax practitioners primarily focussed on the ATO's original proposal to alter the current content of the publicly accessible register of private binding rulings. These submissions and the ATO's former proposals for this register are discussed in detail in chapter 4 of this report.
3.27 Concerns that were raised in submissions about other aspects of the ATO's administration of private rulings were that:
- private rulings take too long to issue;
- private rulings on the same topic can be inconsistent; and
- private rulings cannot be obtained on certain topics.
3.28 The first concern about rulings taking too long to issue, or delays, was the most frequent type of complaint made to the ATOs' Internal Complaints Unit on private rulings issues during the two years ended 30 June 20095.
3.29 The IGT's findings in relation to these concerns and others that were identified during the fieldwork for this review are set out in this chapter.
3.30 These findings do not cover private rulings prepared by the ATO's Aggressive Tax Planning area. Early in the review process, the IGT made a decision to exclude private rulings prepared by this area from the scope of this review. This was because of the unique circumstances which apply to private rulings which are handled by this area of the ATO, which may involve what the ATO considers to be possible tax avoidance. Furthermore, no submission to this review raised concerns about private rulings handled by this area of the ATO. The subject of private rulings handled by this area may be the subject of a later review by the IGT.
3.31 The findings also do not cover class or product rulings. This is because the ATO issues these types of rulings as public rulings rather than private rulings. Issues concerning class rulings did however feature prominently in submissions made to this review. These types of rulings are now the subject of a separate review by the IGT.
3.32 The review did not examine private rulings issued by the ATO on the goods and services tax (GST), the luxury car tax or the wine equalisation tax as rulings on these topics are currently covered by a legislative regime that is different to that which applies to income tax (although the Government has flagged that rulings on these topics will shortly be brought into the same regime as that which applies to income tax rulings). Similarly, the review did not cover rulings or superannuation regulatory issues as these types of rulings are not legally binding on the ATO.
Number and subject matter of private rulings
Number and results of private rulings
3.33 Over the last five financial years, the total number of private rulings on income tax finalised by the ATO has been steadily declining. This is shown in the following table:
|ATO business line||2004-05||2005-06||2006-07||2007-08||2008-09|
3.34 Around 56 per cent of all private rulings finalised during 2008/09 were favourable to taxpayers.
Subject matter of private rulings
3.35 The ATO does not prepare ATO-wide management reports which show the subject matter or topics of private rulings or how these might vary from year to year.
3.36 During this review the ATO identified that the following two topics each accounted for a significant percentage of the 1345 edited private rulings that were awaiting publication on the ATO's register of private binding rulings as at 30 November 2009:
|Topic||Number of edited private rulings on hand as at 30 November 2009||Per cent of all edited private rulings on hand at 30 November 2009|
|Assessability of workers compensation lump sum (SA)||488||32.5%|
|Undeducted purchase price of an annuity (domestic or foreign)||75||5.6%|
3.37 The IGT's fieldwork for this review indicated that, over the 2008/09 year as a whole, the above two topics also appeared to account for similar percentages of all private rulings finalised during that year.
3.38 The rulings on the assessability of South Australian workers compensation receipts are prepared by the ATO's Microenterprise and Individuals (MEI) business line. Based on the ATO statistics quoted above, these types of rulings accounted for 52 per cent of all private rulings from that business line that were awaiting publication as at 30 November 2009.
3.39 Rulings on the amount of the undeducted purchase price (UPP) of an annuity (foreign or domestic) are prepared by the ATO's Superannuation business line. These types of rulings accounted for 60 per cent of all private rulings from that business line that were awaiting publication as at 30 November 2009. These types of rulings are however expected to decrease in future years because of changes to superannuation which came into effect from 1 July 2007.
3.40 Both types of private rulings are straightforward in nature and have standardised arrangements for their preparation which are adopted by both applicants (when requesting these rulings) and by the ATO (when generating these rulings).
3.41 Despite the significant volume of rulings dealing with both these types of rulings, and their standardised preparation arrangements, neither category of rulings is specifically identified in any internal ATO-wide reports prepared by the ATO, although the individual business lines dealing with these rulings are themselves aware of the volume of rulings on these topics.
3.42 This has had a number of effects.
3.43 One effect of the ATO's lack of ATO-wide separate reporting on these and other types of standard rulings, which have a very quick turnaround time, is that the ATO has been reporting that it has met its overall service standards for the timely issue of rulings, when in fact it has not been meeting this standard for certain categories of more complex rulings. This problem has been particularly evident in the Superannuation business line where for the 2008/09 year the IGT's fieldwork found that more than 50 per cent of that business line's non UPP rulings had a lapsed time frame of more than 90 days, which was outside that set by its internal service benchmarks. This aspect of the Superannuation business line's performance on private rulings was not evident in any ATO internal corporate reports provided to the IGT during his fieldwork for this review which dealt with that business line's performance in meeting timeliness standards for private rulings.
3.44 Another effect is missed opportunities, as detailed in the following paragraphs, for further enhancements to the Tax Office's management of its overall resources for producing these types of rulings, other private rulings, public rulings or other forms of interpretative assistance.
3.45 During the course of this review IGT staff raised with the ATO changes to the law on workers compensation in South Australia which appear to have the effect of significantly reducing the demand for rulings on this topic in the future. The ATO is now working jointly with the relevant workers compensation regulator in South Australia on the production of a class ruling that should significantly decrease future demand for rulings on this topic. This should have the effect of freeing up ATO resources that are currently devoted to the production of these types of rulings.
3.46 A further effect is that an opportunity to significantly improve the ATO's published register of private binding rulings has been missed. As discussed in the next chapter, this register currently consists of over 80,000 separate edited rulings. However, based on the above ATO statistics, over a third of these rulings may take the form of one of a very small number of standardised responses on two topics. This suggests that the current number of edited rulings on this register could be significantly reduced by the following means. The above types of edited private rulings could be separately identified on the register, a standard form ruling could be published and each individual advice on these topics could then be associated with the relevant standard form without publishing the actual edited ruling in its entirety. This proposal is also discussed in the following chapter.
3.47 There are also other types of rulings which are a significant percentage of the volume of private rulings in particular business lines. Some of these types of rulings also have standardised preparation arrangements. These include rulings on the sovereign immunity exemption for withholding tax which are prepared by the ATO's Large Business and International (LBI) business line.6 They also include rulings on the assessability of foreign salary income and on the application of the foreign investment fund rules to life policies both of which are handled by the ATO's MEI business line. Again, the ATO has no ATO-wide processes in place to identify, track and report on these types of high volume rulings.
3.48 A process of identifying, tracking and reporting on high volume rulings would allow the ATO to better manage its resources and would also provide useful information to the ATO about private ruling topics that may benefit from alternative ATO approaches. Rulings grouped into high volume or broader category topics would also provide tax policy makers with useful information about the areas of the tax law that may require amendment to assist taxpayer needs. Publication of the top five or ten (or whatever number is appropriate) of the most frequently encountered topics in private rulings would facilitate this process.
3.49 These comments lead to the following key recommendation:
Key Recommendation 1
The Inspector-General recommends that the ATO should:
- to better manage its resources for the production of private rulings, improve its existing management systems to identify, track and report, on a Tax Office wide basis, the most frequently requested private ruling topics; and
- to facilitate the process of providing useful information to the ATO about high demand private ruling topics that may benefit from alternative ATO approaches and also to tax policy makers about areas of the tax law that may require amendment, publish the top five or ten (or whatever number is the most appropriate) of the most frequently requested private rulings topics.
3.50 The ATO agrees with this recommendation.
3.51 As the Inspector-General has acknowledged at paragraphs 2.14 and 3.41, the ATO already takes into account information about the volume of private ruling requests on particular issues at a business line level to help manage our resources and the operation of business processes (as evidenced by our approach to the management of the high volume of Undeducted Purchase Price cases in our Superannuation business line and the South Australian Work-cover cases in our Micro-Enterprises and Individuals business line).
3.52 The ATO agrees to undertake reporting and analysis of the most frequently requested private ruling issues on an ATO-wide basis to be available for consideration in ATO business planning and management processes. Initially this will draw on existing subject data and manual analysis as a pilot exercise to support implementation of recommendation 1.2. We will then review the process (including cost analysis) and investigate the use of analytics to determine what it might usefully provide, with the opportunity for more frequent use as appropriate.
3.53 Where there is a large demand for private rulings on a particular issue, the ATO has a number of options open to it to reduce the need for taxpayers to apply for a private ruling. These include, where appropriate, the issue of a public ruling that can be relied on by all taxpayers experiencing the same issue, making available a fact sheet on our website or by advising government, where a change in the law could be considered. All of these continue to be used as required.
3.54 The ATO agrees, in the interests of transparency, that there is value in informing the community of those issues that comprise the most requests for a private ruling. We will need to consider the level of granularity when revealing the details of those requests to ensure that it is providing information of interest. For instance, information that simply states that the top two issues related to the assessibility of income and the deductibility of expenses may not be of great use. More granularity requires more system sophistication and analysis. Consequently, we will need to consider what can be achieved in the short term, compared with the medium term and its priority against other requests for system enhancements.
Whether private rulings cannot be obtained on certain matters
3.55 The circumstances in which the ATO can refuse to issue a private ruling are limited. In many other countries, the circumstances in which revenue authorities can refuse to rule are broader.
3.56 Private rulings can be issued on both prospective and past transactions whereas in several countries private rulings can only be obtained on prospective transactions.
3.57 Under the present legislative regime for rulings the only circumstances in which the ATO can refuse to issue a private ruling are as follows:
- the applicant for the ruling is not the taxpayer or their representative (although there are some limited exceptions to this rule);
- the ruling would prejudice or unduly restrict tax administration;
- the matter is already being, or has been, considered by the Commissioner (for example, the relevant taxpayer is under audit and the audit will consider the relevant issue);
- the ruling applicant fails to provide further information that the Commissioner requests during the rulings process;
- the matter involves the exercise of a power and the Commissioner has decided or decides whether or not to exercise the power; or
- the assumptions to be made by the Commissioner affect the correctness of the ruling (for example, because they are too numerous or substantial).
3.58 The ATO has stated to the IGT that it does not, unlike many other countries, have a list of certain specific topics upon which it refuses to rule for income tax purposes.7
3.59 However, submissions to this review have stated that there are, or have been in the recent past, examples of 'no go' topics in the income tax area upon which the ATO has refused to rule.
Private rulings on Part IVA issues
3.60 The possible application of Part IVA (which is a general anti-avoidance provision) was one topic on which, according to submissions, the ATO would not rule.
3.61 Fieldwork conducted by the IGT, which was based on private rulings finalised or on hand during the 2008/09 year and part of the 2009/10 year, did not validate this concern. The sample of private ruling cases reviewed by staff of the IGT included cases where the ATO had positively confirmed that Part IVA would not apply, as well as cases where it had stated that Part IVA would apply.
3.62 All cases reviewed by the IGT which involved either the positive or negative application of Part IVA had however taken a lengthy time to finalise. All involved elapsed time frames that were well over the 28 day period referred to in the ATO's service standard. These lengthy time frames were partly due to the ATO seeking further substantial information from taxpayers to determine if Part IVA applied and waiting for that information to be provided but were also partly due to ATO internal procedures. These procedures require business lines to refer cases where Part IVA may apply to a member of the Tax Counsel Network (TCN). This network is organisationally separate from the business lines which prepare private rulings and it has work priorities that may not match those of the business lines. This can lead to delays in the finalisation of private rulings that are referred to this network. These delays may have fuelled perceptions that the ATO will not rule on Part IVA issues.
Other perceived 'no go' issues
3.63 During fieldwork for this review the IGT found that from time to time the ATO puts in place special arrangements for the review of rulings on particular topics. For example, for part of the 2008/09 year, there was an internal directive in place that all private rulings dealing with so-called blackhole expenditure, being expenditure for which a deduction may be claimable under section 40-880 of the Income Tax Assessment Act 1997, were to be reviewed by a particular member of TCN prior to being issued. This directive had the effect that a number of private rulings on this topic were delayed for very significant periods — in some cases for over a year and a half — as the relevant TCN member was unable to work on these rulings due to other overriding work priorities.
3.64 Again, the private rulings on this topic that were the subject of significant delay were eventually issued. However, the delays that occurred appear to have fuelled perceptions that the ATO would not, during at least the period of delay, rule on certain section 40-880 issues.
3.65 To address perceptions by taxpayers and their advisers that the ATO will not rule on certain topics, the IGT makes the following recommendation:
Key recommendation 2
The ATO should address perceptions that it may have topics on which it will refuse to make private rulings by adopting measures such as:
- notifying applicants for private rulings on particular topics of any key issue escalation arrangements put in place for private rulings on those topics and what impact those arrangements may have on the timeliness of rulings on those particular topics; and
- also notifying (where appropriate) the public of the nature of any such arrangements and what impact these arrangements may have on the timeliness of rulings on those particular topics.
3.66 The ATO agrees with this recommendation.
3.67 The ATO does not have a list of issues on which it will refuse to rule. The Inspector-General found no evidence to counter this view. Where the issues raised in a private ruling are complex or raise novel issues, the ATO does have processes in place to ensure that the appropriate expertise is engaged to enable an accurate and consistent response to be given to the applicant. These processes also apply where the officer responding to the private ruling needs an ATO precedential view on the interpretation of that part of the law relevant to the private ruling, and one needs to be created. Tax officers with specialist knowledge are engaged for this purpose.
3.68 Part of the responsibility of the case officer preparing the response to a private ruling is to keep the taxpayer informed of progress, especially where there may be likely delays. In fact, our published service standards for private rulings require the case officer to negotiate a new timeframe for the response if it will not be issued within 28 days of receipt of all information required to prepare the answer. This is the usual case where escalation along the lines mentioned above is necessary. It is at this time that the case officer will inform the taxpayer of the escalation or other arrangements.
3.69 In addition to the personal notification mentioned above, there may be instances where it would be appropriate to inform the general public along the lines recommended by the Inspector-General. For instance, following the decision in Bamford v Commissioner of Taxation  FCAFC 66, the Commissioner issued Practice Statement Law Administration PS LA 2009/7 to explain the actions he would take on a range of fronts while the matter is on appeal in the High Court. For rulings, paragraph 53 is relevant. It states
'Should a request be made for a private, product or class ruling that requires the Commissioner to express a view on the extent of a particular beneficiary's liability to tax under sections 97 or 100, or a trustee's liability under sections 98, 99 or 99A, the ruling should reflect the Commissioner's views as to 'income of the trust estate' and 'share' in Division 6. However in such cases, staff should first seek to obtain agreement from the ruling applicant to defer the issue of the ruling pending the outcome of the Bamford litigation.'
ATO resource arrangements for preparing private rulings
3.70 Private rulings on income tax are not prepared by one centralised area within the ATO, unlike some overseas countries. Instead, private rulings on income tax issues can be worked on by ATO staff in one or more of four major business lines, together with (in some cases8) staff in one or more of six separate Centres of Expertise as well as (again, in some cases) staff from the Tax Counsel Network.
3.71 While each of these ATO areas that may possibly be involved in private rulings work adopts the same computer system for processing these rulings, each area has developed certain unique management processes for this work.
3.72 Appendix 3 contains a brief description of the management processes for private rulings adopted in:
- each of the Tax Office's four major business lines (other than the Aggressive Tax Planning area) which are responsible for preparing private rulings. These business lines are the lines for Microenterprises and Individuals (MEI), Small and Medium Enterprises (SME), Large Businesses and International (LBI) and Superannuation (Super);
- the ATO's Centres of Expertise, who must be involved in any private ruling which involves the creation of an ATO precedential view; and
- the Tax Counsel Network, who must be involved in any private ruling which involves the possible application of Part IVA (the general anti-avoidance provision) or section 45B (which involves demergers of corporate groups) of the Income Tax Assessment Act 1936 or which involves a significant issue that has been designated as a Priority Technical Issue (PTI).
3.73 During his fieldwork for the review the IGT found that these management processes for private rulings could lead to large numbers of ATO staff being involved in any one private ruling. Where a private ruling involved the creation of an ATO ID, a minimum of six ATO personnel (three from the relevant business line and three from the relevant Centre of Expertise) would be involved in the creation of the relevant private ruling. Where multiple business lines and multiple Centres of Expertise (CoE) were involved (as was the case for several of the private rulings examined by staff of the IGT) each new area of the ATO that came in would add at least two and sometimes three additional ATO personnel to the ruling creation process.
3.74 The IGT found that the creation by the ATO of a large team to handle a private ruling did not cause significant delays where the ruling was subject to the ATO's priority rulings process. This priority process is only available in respect of significant issues for large business taxpayers and some small to medium enterprise taxpayers and, in the 2008/09 year, applied to only a limited number (16) of all private ruling cases.
3.75 For rulings that were not subject to this priority process, the IGT found that the creation of a large ATO team for the ruling did lead, in some cases, to significant delays in the timely processing of the relevant ruling request. Such delays are clearly inappropriate, given the purpose and design of the private rulings system. The aim of this system is to provide taxpayers with certainty, on a timely basis, of the ATO's view of an arrangement. Generally any revenue risk is limited because, if any private ruling is incorrect, it is confined in its application to only that taxpayer.
3.76 Staff of the IGT also found examples of situations where the existence of a large ATO team working on a single ruling matter gave rise to significant productivity issues.
3.77 For example, cases were encountered where extensive work on a ruling continued to be done by one area of the ATO when another area of the ATO was aware that the taxpayer no longer actively wished to pursue the ruling request.
3.78 Other cases were encountered where there appeared to be no need for the sequential involvement of multiple centres of expertise and/or business lines and/or Tax Counsel. For example, in a number of cases involving the single issue of the application of the section 40-880 (blackhole expenditure) provisions (to, say, a claim to deduct legal expenses) where no existing ATO precedent existed, at least two ATO Centres of Expertise would always be involved, as well as a business line and a Tax Counsel.
3.79 A business line would first look at the ruling and prepare a detailed written analysis of why it thought section 40-880 did or did not apply. It would then refer the ruling to the Centre of Expertise for Losses and Capital Gains. This centre would look at the ruling because section 40-880 is a section which allows a deduction only where no other provisions apply. It therefore does not apply if the relevant expense is taken into account in calculating a capital gain. This centre would therefore examine how the capital gains tax provisions applied to the expense under consideration. When this centre had finalised its deliberations, the ruling would then be considered by the Centre for Administration, Business and Personal Taxes which handles miscellaneous business tax issues. This centre would also prepare a detailed view on the application of section 40-880, based on the findings of the first centre on the capital gains tax aspects. Finally, TCN would also then look at the ruling because, at the time, all rulings involving the application of section 40-880 needed to be authorised by TCN.
3.80 In these types of cases the ATO could have significantly reduced the volume of work involved by obtaining and applying the views of the known ultimate decision maker — in this case this was TCN — within a reasonable time of the very beginning of the case.
3.81 The ATO has recognised that the sequential involvement of multiple areas of the ATO in certain private rulings is a factor which can lead to delays in the issue of that ruling and productivity issues. During the course of this review it advised the IGT that it was undertaking a review which was examining options for reducing the numbers of separate areas of the ATO that can be involved in private ruling cases. These options include the possible amalgamation of its current Centres of Expertise with the TCN. The IGT considers that these options should be pursued because, if implemented appropriately, it should have the effect of reducing a major source of delay in the ATO's current processes for issuing private rulings.
3.82 These comments lead to the following key recommendation:
Key recommendation 3
To address delays and productivity issues that may arise from having large teams from different areas of the Tax Office working on private rulings, the Tax Office should:
- implement measures to ensure that only the minimum number of Tax Office personnel necessary to produce a timely and high quality product are employed on any private ruling;
- introduce and develop productivity benchmarking, exploring both internal and external criteria, for Tax Office personnel engaged in the private ruling decision-making process; and
- ensure that the minimum necessary number of personnel on a private ruling case includes the ultimate case decision-maker from the time when this ultimate decision-maker has been identified.
3.83 The ATO agrees in principle with this recommendation.
3.84 The ATO's approach is to ensure that staff with the appropriate expertise are engaged early in the process. The ATO does not believe that an emphasis on raw numbers achieves this.
3.85 The ATO is currently in the implementation stages of an initiative designed in part to achieve this. Its features include an early engagement and triage model that classifies private rulings according to factual and technical complexity and ensures that both the right people are involved and the information gaps are identified early. The model also mandates the completion of a case plan in the first 14 days of receiving a request for a private ruling which will establish the expectations of both the ATO and the taxpayer. Discussions with the taxpayer are a crucial element. Our initial focus is the large market. Based on our experience during implementation, we will look to embed appropriate features in other markets, remembering that one size does not necessarily best suit all circumstances. Our overall aim is to ensure that we get the correct answer in the quickest time and that we keep the taxpayer informed.
3.86 The ATO is concerned about the delays that do occur in responding to some requests for private rulings. Often these involve complex or novel issues that require specialist expertise and often emanate from the large market. The initiative mentioned in 3.85 above should make inroads in addressing the issue of timely responses to these requests for private rulings. When an applicant can give us notice of a prospective transaction early, establishing expectations up front, it can result in a better quality private ruling request, which in turn helps us get back to the applicant in a more timely manner.
3.87 We agree with the Inspector-General that undertaking relevant benchmarking could be useful and we will explore it with pilot projects to test our approaches. This is, however, not new ground for us. We have sought to find benchmarks in the past. We know from that experience how challenging it is to find comparable external organisations that are leaders in this area.
3.88 The ATO reiterates that it is not so much about the numbers of staff but the appropriate staff. As explained above, the ATO prefers to focus on having the appropriate expertise engaged early to resolve the issue/s raised in the request for a private ruling. This includes those officers that contribute to the final decision. The time of engagement is subject to the needs identified as part of the triage process and ongoing management of the private ruling.
Other productivity and timeliness issues with private rulings
3.89 Although the number of private rulings finalised by the ATO has been steadily declining in recent years, ATO resources devoted to generating these rulings has increased by 25 per cent. This raises a further issue of ATO productivity in relation to this type of work.
3.90 Concern about this productivity issue and with timeliness issues for private rulings led to an internal ATO review on the productivity of private rulings that was completed late in 2008. This review noted that overall the ATO was using more staff and taking longer to do fewer private rulings. However, it concluded that although this was justifiable, there was room for improvement and for further work.
3.91 The internal review pointed to the complexity of the subject matter of rulings as a possible reason for increased resourcing. The review also noted that the historic decline in the number of requests for private rulings was due to a number of factors, such as:
- the availability of better alternative sources of assistance, such as information from the ATO's website and assistance from ATO call centres; and
- deliberate ATO strategies to switch private ruling requests where appropriate to faster, lower cost, less resource intensive products such as oral or written guidance.
3.92 The ATO's review found that when total non-private ruling guidance work was combined with private rulings work, historic trends showed that there was a slight decrease in both the total volume of this work and the resources devoted to it over time. This, when combined with other data and information, led the report to conclude overall that there was no evidence of widespread or systemic deficiencies in its productivity performance on private rulings but that there was room for improvement in some areas and that it needed to do more work to understand and verify the resourcing data.
3.93 As a result of this internal report, the ATO resolved to take a range of steps including:
- to better differentiate between complex and routine private rulings cases for the better management of risks, resources and reporting;
- to include in its Annual Report data showing the shift from binding private rulings to more practical and user friendly interpretative advice;
- to continue with business line benchmarking and improvement strategies;
- to continue to better understand and monitor workload and workforce data and reporting systems; and
- to continue to encourage and evaluate innovative suggestions for improvement.
3.94 The IGT notes that this internal review did not seek the views of taxpayers or their representatives on why they were seeking fewer private rulings. The ATO has advised the IGT that this was because it relied on a survey of taxpayers and advisers conducted in 2006 to reach its conclusions rather than canvassing taxpayers' and advisers' views specifically for this internal review.
3.95 In his review of potential revenue bias in private rulings, which was conducted over the period of 2005 to 2008, the IGT concluded that, for large taxpayers, a perception of revenue bias tends to deter these taxpayers from seeking a private ruling unless it is necessary. The IGT also found that large businesses generally consider that external counsel advice is a better risk management strategy than a private ruling. These types of views may therefore be another reason for the decline in private rulings over recent years.
3.96 In its 2008/09 Annual Report the ATO noted that its service standard for private rulings was 80 per cent finalised within 28 days of receipt of all information or by a negotiated due date. It noted that it met this service standard but that concerns were raised about the timeliness of responses where there was a negotiated due date.
3.97 The 2008/09 Annual report also includes the following data showing the median and mean number of elapsed days from the date of receipt of a ruling request in the ATO to the date of issuing a ruling. The ATO has provided data for both median and mean elapsed time but has noted that the median is the better measure because it is not impacted by relatively small numbers of rulings that take a long time to complete.
|Category||Cases completed (2007‑08)||Cases completed (2008‑09)||Percentage within standard (2007‑08)||Percentage within standard (2008‑09)||Elapsed time in days||Elapsed time in days|
|Mean (2007‑08)||Mean (2008‑09)||Median (2007‑08)||Median (2008‑09)|
|Small to medium||761||783||88.9||84.2||84||90||56||55|
NOTE: Annual turnover ranges: micro enterprises — up to $2 million; small to medium enterprises — between $2 million and $250 million; large business — more than $250 million.
3.98 The period of lapsed days is not the time used by the ATO to measure its performance in the delivery of rulings as it does not take into account periods of delay which are due to the ATO requesting information from the taxpayer. Nevertheless, this lapsed day measure period does provide a supplementary means of assessing the ATO's performance in the timely delivery of private rulings.
3.99 The Annual Report data on the lapsed days measure indicates that in 2008/09 for all types of taxpayers other than individuals the median number of elapsed days for private rulings exceeded 28 days from receipt of the original ruling request. This data appears to confirm statements made in submissions to this review that private rulings are not issued within 28 lapsed days. This means that, if non-individual taxpayers have a 28 day period or less for entering into the transaction that is the subject of a private ruling request, they cannot generally expect to receive a ruling within this time frame.
3.100 The ATO has also advised the IGT that in the six months to 31 December 2009, it has not met its set service standard for private rulings. In these six months only 69 per cent of private rulings have been finalised within 28 days of receipt of all information or by a negotiated due date. During this period the ATO progressively switched to a new computer system, known as the Siebel system, for the management of its private rulings work.
3.101 As noted above, concerns about the timeliness of rulings featured prominently in submissions made to this and other previous reviews on private rulings. Submissions stated that one possible cause of these delays was a perceived practice of ATO staff making requests for further information from taxpayers in all private ruling matters, even where this did not seem to be justified. The IGT's previous review on potential revenue bias in private rulings also examined this concern and recommended that the ATO should take steps to vet requests for further information, should (if requested) provide reasons why the information is relevant and should identify the specific aspect of the technical issue that turns on the requested information. The ATO agreed with this recommendation.
3.102 The IGT's findings in relation to the productivity and timeliness of private rulings arising from this present review are incorporated into Key Recommendation 4, which is set out later in this chapter. This key recommendation takes into account the IGT's findings in relation to quality and integrity issues associated with the administration of private rulings, which are discussed in the next two sections of this chapter.
Quality issues with private rulings
3.103 Submissions to this review raised some concerns about possible inconsistencies in some private rulings, but otherwise submissions raised no concerns about the quality of private rulings issued by the ATO. A number of submissions, all of which were prepared prior to the ATO's switch to a new computer system for managing private rulings, praised the quality of written rulings issued by the ATO.
3.104 The IGT's fieldwork for this review, which was based on rulings finalised or on hand during the 2008/09 year did not reveal any examples of inconsistent rulings. Submissions did provide examples of inconsistent edited private rulings that were on the ATO's register of private binding rulings, but these involved rulings issued in years of income prior to 2008/09 and were therefore not examined during the course of this review.
3.105 The IGT's fieldwork for this review has however raised concerns that the quality of private rulings being generated under the new Siebel system may have deteriorated from previous years, which could be serious.
3.106 The IGT's fieldwork was conducted in two phases.
3.107 The first, and major, fieldwork phase involved examining 163 randomly selected private rulings that were completed or on hand during the 2008/09 year. These rulings were drawn from the following business lines: LBI (26 rulings), MEI (82 rulings) Superannuation (16 rulings) and SME (39 rulings); and involved interviewing ATO staff working at a number of different ATO sites around Australia. All of these rulings were completed during the time that the ATO was using a computer system known as the Technical Decision Making System (TDMS) to manage its private rulings.
3.108 These private rulings showed that the ATO had a strong performance in the issuing of high quality private rulings as only three of these rulings examined during this fieldwork displayed any quality issue.
3.109 A quality issue associated with a particular ATO private ruling has also been publicly referred to in a recent Administrative Appeals Tribunal decision. The case was that of Investa Properties Limited v Commissioner of Taxation  AATA 121 25 February 2009. The quality issue identified in the decision of the Tribunal was that the ATO had not, in the private ruling it had given to the taxpayer, addressed the original question raised by the taxpayer in their application for a ruling. The AAT found that it had no power to restate the scheme that was the subject of the review of objection decision. Accordingly, it dismissed the application for review of the objection decision and expressed the hope that the Commissioner would reconsider the actual scheme identified and issue a new ruling on the subject matter of the scheme about which the taxpayer sought a private ruling.
3.110 The second phase of the IGT's fieldwork involved examining, by way of a desktop review, a smaller sample of private rulings (20) that had been finalised after the ATO switched to the new Siebel computer system for managing its rulings. These private rulings were from the following business lines: LBI (3 cases), MEI (11 cases), SME (3 cases) and Superannuation (3 cases). The aim of the review was to see if the new Siebel system was giving rise to any obvious problems with the generation of private binding rulings.
3.111 The IGT found that 10 of the 20 sampled Siebel cases (that is, 50 per cent) had quality problems. These quality problems included statements in the ruling that appeared to be technically inaccurate, statements that were unclear or incomplete, an absence of any cited ATO precedent in the ATO's internal working documents for the private ruling, a failure to address the question raised, and inappropriate notations, such as exclamation marks.
3.112 In the IGT's sample, the MEI business line had the most number of rulings with quality problems. The LBI area had the next highest number of private rulings with a quality problem, although these were of a relatively minor nature compared to the MEI rulings. There were also superannuation rulings which had a quality problem. None of the SME rulings had an obvious quality problem.
3.113 During the period in which the sampled Siebel cases were generated, the ATO was applying an Integrated Quality Framework (IQF) system to assess the quality of its private rulings. This quality system differed from the Technical Quality Review (TQR) system which was used during most of 2008/09. The IGT's findings on the 20 sampled Siebel cases also therefore raises issues as to the effectiveness of the ATO's IQF system for private rulings, at least during the time of transition between the TDMS and Siebel systems. However, the small sample of Siebel-generated cases to date that the IGT has reviewed in the final stages of this review means that it is not possible to come to a definitive conclusion on this issue.
Integrity issues with private rulings
3.114 The computer system for managing private rulings which the ATO had in place prior to August 2009, the TDMS, was tailor-made to handle ATO interpretative and other work and in particular private rulings work. The TDMS system was introduced in 2001/2 after the release of the findings of two significant reviews of the ATO's rulings system that was then in operation.9 The Siebel system which has now substantially replaced TDMS10 is more generic in nature and is not specifically designed for rulings work. This leads to an issue of whether the new system will maintain the ruling-specific integrity, quality and other controls that were built into the previous TDMS system.
3.115 Quality and timeliness issues concerning Siebel-generated private rulings have already been discussed in this report. This section examines the extent to which the design of the new Siebel system maintains the integrity and other controls of the previous TDMS system.
3.116 Early in this review the IGT obtained from the ATO a comparison of the integrity controls of the TDMS system and their equivalents in the new Siebel environment.
3.117 This comparison indicated that not all integrity controls that were in the previous TDMS system have been replicated to the same extent in the new Siebel environment. On the other hand, in some cases, Siebel's integrity controls were superior to those which previously existed in TDMS.
3.118 Based on this comparison, the ATO is working on ensuring that all important integrity controls for private rulings are adequately replicated in the new environment. This work is expected to be fully completed within 18 months.
3.119 One example of an integrity control which has not been replicated to the same degree in the new Siebel system relates to the process of having all rulings that are issued by the ATO published in an edited form. This integrity control, and the measures the ATO are taking to ensure that there is an effective substitute in the new Siebel environment, are both discussed in the next chapter of this report.
ATO's internal search engine for private rulings on particular topics
3.120 The new Siebel system, unlike TDMS, does not allow case officers who prepare rulings to conduct an effective free text search to specifically locate any other interpretative advice, including private rulings, the ATO may have provided on a particular topic. The previous TDMS system allowed such searches to be made. These searches were regularly made by ATO officers as part of the process of preparing private rulings. The current Seibel advance search facility for a given topic produces all Siebel-generated ATO documents which contain the designated search terms. Searches of this kind generate very large volumes of ATO material and only some of this material will be private rulings or other interpretative advice on a designated search topic. The current search facility is also case-sensitive. This means that the results of a search for particular topic will depend on whether or not the search terms contain any capital letters. These issues regarding the new Siebel system's free text search function raise significant concerns relating to the integrity and consistency of private rulings being generated under the new Siebel system.
3.121 The ATO has advised the IGT that it is satisfied that the Siebel system's advanced search provides enhanced functionality over its TDMS equivalent. However it acknowledges that there are issues with the accuracy of the seach functionality within Siebel, which the ATO considers are being addressed through appropriate mechanisms within the ATO.
Other controls, including management reports
3.122 During the second phase of fieldwork for this review which involved selecting 20 Siebel-generated private rulings cases, IGT staff found that there were a number of problems with internal ATO management reports for all private rulings cases that were being generated under Siebel.
3.123 The ATO has confirmed that it is currently working on improving the types of management reports on private rulings generated under the Siebel system.
Need for a further review
3.124 The IGT's current findings in relation to the timeliness, quality and integrity of private rulings generated under the new Siebel system raises concerns about whether the new system has already led or will lead to a deterioration in the ATO's previously strong performance in relation to the production of quality and/or timely rulings. The sample of Siebel-generated cases to date that the IGT has reviewed in the final stages of this review is too small to come to a definitive conclusion on these issues.
3.125 The IGT notes that, as with the introduction of any new system, especially those of the magnitude being implemented by the ATO under its overall Change Program, it would be expected that it will take some time for its staff to become accustomed to the new functionality and proper ways to use the new system to produce high calibre rulings.
3.126 The IGT has discussed these issues with the ATO and notes that the ATO intends to examine these issues further over the coming months. The IGT proposes that a review of private rulings generated under the Siebel system be conducted after the ATO has completed its phasing-in work for this new system.
3.127 These comments lead to the following key recommendation:
Key recommendation 4
To address possible concerns that the new Siebel computer system for handling private rulings may have led to a deterioration in the Tax Office's previous strong performance in the delivery of timely, high quality and consistent private rulings, the Inspector-General recommends:
- that a review which addresses the timeliness, quality, consistency and integrity of private rulings being produced by the Tax Office under the Siebel computer system be conducted after the Tax Office has fully completed its phasing-in work for this new system; and
- that the ATO takes steps, as soon as possible, to ensure that ATO staff can conduct effective searches across the ATO's internal databases for any private rulings on a particular topic.
3.128 The ATO agrees with recommendation 4.1 and agrees in part with recommendation 4.2.
3.129 The ATO notes the Inspector-General's acknowledgment that with the introduction of any new system, especially those of this magnitude, it would be expected that it will take some time for staff to become accustomed to the new functionality and proper ways to use the new system most effectively and efficiently.
3.130 Over the first nine months of operation of the IT system for the ATO's interpretative assistance work (including private rulings) we have identified a range of issues across system functionality, operation and systems usage, including those mentioned in this report, and more broadly across our interpretative assistance work practices, processes and procedures.
3.131 We also acknowledge that these issues have had some flow on effect to the quality of some private rulings, although we were surprised by your assessment of our quality given our own quality assessment results (based on assessment of a larger sample of cases, established criteria, and in some cases involving independent community representatives) do not support your findings. Our latest quality results show timeliness as the most prevalent issue (with approximately twenty percent of cases assessed as being outside standards), and with correctness, administrative soundness, appropriateness, integrity and consistency all within normal (pre-Siebel) parameters. However, given the improvement we have already seen and the action we are taking to bed down the new system we are confident that we are on track to mirror the strong performance observed by the Inspector-General of our earlier handling of private rulings.
3.132 The ATO will ensure that timeliness, quality, consistency and integrity of private rulings is addressed in the current project focussed on addressing issues arising from our migration of interpretative assistance work to the new IT system, with input to the broader evaluation of the Change Program as appropriate. Any resulting corrective action will be considered along with other identified IT change requirements and priorities arising from that broader evaluation.
3.133 As the Inspector-General has acknowledged at paragraphs 2.44 and 3.121 of the report, the ATO has identified issues with the accuracy and reliability of the search engine behind the Siebel advanced search functionality. This is currently being investigated and once fixed will enable the designed free text search across all cases and content within Siebel, including private rulings.
3.134 The Inspector-General expressed concern at paragraphs 2.43 and 3.120 about the risk to integrity and consistency of private rulings being generated under the new system. The process for ensuring the correct application of the law to the facts in response to each private ruling request is that ATO officers:
- Identify and understand the issues raised in the request and ensure there is sufficient information on which to rule
- Identify and understand the relevant legal provisions that apply to the issues
- Identify any relevant ATO precedential document (which does not include earlier private rulings) with respect to the provisions of the relevant law and the relevant facts, which are readily available to ATO staff via the ATO's searchable legal database
- Escalate the issues for the creation of an ATO precedent if no such precedent exists and one is required
- Prepare a response to the request
- Refer for authorisation and quality control by a duly accredited authorising officer prior to issuing to the applicant.
We will continue to reinforce this process to our staff, the reasons for this approach, and the risks of not following it.
3.135 Consequently, design and delivery of the specific functionality being recommended by the Inspector-General — that is, enabling Siebel searches to be limited to private rulings — is not a priority in the current climate.
3.136 During the review the IGT, with the agreement of the ATO, also examined the extent to which taxpayers and the ATO were making use of the system of oral rulings which is provided for in Division 360 of Schedule 1 to the Taxation Administration Act 1953 (TAA 1953). The current oral rulings system has been in place since 1 January 2006.
3.137 Oral rulings are expressions of the Commissioner's opinion of the way in which the tax law applies to a particular arrangement which are given orally rather than in writing. They are given only to individuals (or their legal personal representative) and are only available on straightforward income tax matters. They cannot be given on business or complex matters, nor can they be given to tax agents. The Commissioner is legally bound by an oral ruling in the same manner as he is legally bound by written private rulings.
3.138 Oral rulings are separate from what the ATO calls oral guidance. Oral guidance involves advice that is provided orally on matters of a general, straightforward or simple nature. The Commissioner is not legally bound by oral guidance but taxpayers are protected from penalties, if there was full and true disclosure of the material facts relevant to the enquiry, and also interest, if the taxpayer has relied on the oral guidance reasonably and in good faith.
3.139 The RoSA review by Treasury in 2004 examined the oral rulings system. At that time the system was resulting in only a handful of successful requests for oral rulings.11 The system at this time restricted binding oral rulings to a limited class of individuals who were not in business, had simple tax affairs and whose tax enquiries were 'simple'. Matters of administration, procedure, collection and ultimate conclusions of fact were not within the scope of binding oral rulings.
3.140 The RoSA review made a number of recommendations which were aimed at encouraging the expansion of the oral rulings system for non-business self-preparers. These recommendations expanded eligibility for oral rulings and were implemented in the oral rulings legislation that came into effect on 1 January 2006.
3.141 Under current ATO processes, oral rulings can be provided to an individual who orally request an oral ruling. An oral ruling can be offered by the ATO when a taxpayer makes a phone enquiry or when they have made a request for written advice. Taxpayers receive a registration identifier for an oral ruling but are not entitled to receive a written record of the ruling. Taxpayers who are treated by the ATO as restricted access taxpayers are ineligible for oral rulings because of ATO systems issues.
3.142 Tax officers are instructed only to provide an oral ruling if the question posed is covered by an approved response that fully answers the query. This will generally be in the form of an existing client contact script. If an approved response does not exist, but an oral ruling is appropriate, the response needs to be cleared by a technical specialist based on the specific facts of the case.12
3.143 The IGT found that during the 2008/09 year there were only 13 oral rulings issued by the Tax Office. The MicroEnterprises and Individuals business line issued 11 of these oral rulings, while the Operations Business line issued the other two. In the previous 2007/08 year there were 82 oral rulings. During 2008/09 the ATO provided 13,982 items of interpretative guidance on income tax matters of which 2,915 were oral guidances not in the form of an oral ruling.
3.144 During fieldwork for the review, ATO staff advised the IGT that they perceived that the amount of work required to prepare an oral ruling was similar to that required for a private ruling. For instance, similar research and approval processes need to be followed. In addition, where it could be feasible to give an oral response to a written request, that request needs to be withdrawn in writing by the taxpayer before an oral ruling can be provided. Because of this, ATO staff preferred to issue a private ruling, rather than an oral ruling, so as to provide a tangible response to the taxpayer.
3.145 The administrative costs associated with the oral rulings system are disproportionate to the low level of useage of the system. The Tax Office maintains detailed administrative processes for these types of rulings. These processes include a number of publicly available ATO practice statements and fact sheets dealing with oral rulings13 as well as a number of internal ATO documents and training packages on this subject.
3.146 In the light of these comments, the Inspector-General is of the view that the Government should consider abolishing the oral rulings system and removing the relevant provisions dealing with oral rulings from the TAA 1953.
3.147 The IGT notes that the Board of Taxation made a similar recommendation in its 2008 Review of the Legal Framework for the Administration of the GST.14
3.148 The IGT therefore makes the following recommendation:
Key Recommendation 5
In view of the continuing low level of usage of the oral rulings system , the Inspector-General recommends that the Government should consider abolishing the oral rulings system and removing the relevant provisions dealing with oral rulings from the Taxation Administration Act 1953.
3.149 This is a matter for government.
4 The ATO's advice and guidance framework is set out in more detail in Practice Statement PS LA 2008/3 -Provision of advice and guidance by the Tax Office.
5 The ATO has advised the IGT that its internal complaints area received 98 complaints relating to private rulings issues in 2007/08 and 2008/09. Of these, 78 related to the time taken to provide the ruling. Of these 78 complaints, 59 complaints were upheld.
6 The recent Sovereign immunity law change announcement is expected to address this specific case, but the principle remains the same.
7 The ATO does publicly state that it has an embargo on private rulings in other areas. In this context, the term 'embargo' refers to a delay in the issue of ruling rather than a refusal to ever issue a ruling on the relevant matter. A recent example of this has arisen in the area of superannuation regulation The minutes of the National Tax Liaison Group meeting of December 2009 at agenda item 18.12 confirms that the ATO, as at that date, had an embargo on the issue of advice about borrowings (instalment warrants) referred to in section 67 (4A) of the Superannuation Industry (Supervision) Act 1993.
8 The ATO has advised that, in 2008/09, 300 issues pertaining to private rulings were escalated to the Centres of Expertise or to TCN.
9 These reviews were as follows: Sherman, Tom, Report of an Internal Review of the Systems and Procedures relating to Private Binding Rulings and Advance Opinions in the Australian Taxation Office, 7 August 2000, available at www.ato.gov.au and Australian National Audit Office, The Australian Taxation Office's Administration of Taxation Rulings, Audit Report No. 3 of 2001-2, 17 July 2001.
10 The ATO has advised that all new private ruling requests have been handled in Siebel since the deployment of this system in August 2009. However, requests on hand at the time of this deployment continue to be handled in TDMS which is due for decommissioning (at least as a case actioning system) in May 2010.
11 The discussion paper for the RoSA review issued on 29 March 2004 noted that, during the 2002/3 year there were only 9 oral rulings issued on income tax matters: see Australian Treasury, Discussion Paper, Review of Aspects of Income Tax Self Assessment, 20 March 2004 at paragraph 2.1.1.
12 Practice Statement PS LA 2008/3 at paragraph 182.
13 See for example the material contained in PS LA 2008/3 at paragraphs 161 to 191.
14 Board of Taxation, Review of the Legal Framework for the Administration of the GST, December 2008 at p. 77.