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A report to the Assistant Treasurer

October 2013


Telephone: (02) 8239 2111
Facsimile: (02) 8239 2100

Australian Government - Inspector-General of Taxation crest

Level 19, 50 Bridge Street
Sydney NSW 2000
GPO Box 551
Sydney NSW 2001

21 October 2013

Senator the Hon Arthur Sinodinos AO
Assistant Treasurer
Parliament House
Canberra ACT 2600

Dear Minister

Review into Aspects of the Australian Taxation Office's Use of Compliance Risk Assessment Tools

I am pleased to present you with my report of the above review. The ATO's use of risk assessment tools has been a persistent concern across taxpayer segments over a number of reviews.

Stakeholders have generally supported the Australian Taxation Office's (ATO) risk-based approach which informs its compliance activities. However, they believed an unnecessary but significant compliance burden has been imposed on them due to inaccuracies in risk assessments, ineffective communication and disproportionate compliance action to perceived risks.

I have reviewed a range of risk assessment tools and recommended the adoption of a set of guidelines to assist the ATO design more effective risk assessment tools for the future. In addition, I have made recommendations to improve existing risk assessment tools with which taxpayers have raised most concern.

Overall, I have made 16 recommendations to all of which the ATO has agreed. Once implemented appropriately, they should result in extensive and enduring improvements to the ATO's risk assessment processes.

I am grateful for the support and contribution of taxpayers, tax practitioners and their representatives to this review. The willingness of many to provide their time, expertise and experience in preparing submissions and discussing issues with my office is greatly appreciated. I also thank ATO officers involved in this review for their professional cooperation and assistance.

Yours faithfully,

SIGNED

Ali Noroozi
Inspector-General of Taxation


© Commonwealth of Australia 2013

ISBN 978-0-642-74938-3

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