1.1 This is the report on the review conducted by the Inspector-General of Taxation (Inspector-General) of the time taken for the Australian Taxation Office (ATO or Tax Office) to complete audits of businesses. It was carried out pursuant to section 10 of the Inspector-General of Taxation Act 2003 (IGT Act).

1.2 The review was announced on 23 November 2004. Its terms of reference are reproduced at Appendix 1 to this report. Details of how the review was conducted are given in Appendix 2.

1.3 The review was conducted pursuant to subsection 8(1) of the IGT Act, being a review conducted on the initiative of the Inspector-General. The decision to undertake the review was prompted by concerns raised by industry and tax practitioners.

1.4 Since announcing that this review was to be commenced, the Tax Office has made or proposed changes to its audit practices and staffing arrangements. These changes made or proposed by the Tax Office are noted in this report wherever relevant.


1.5 Sincere thanks are extended to those organisations representing small businesses, accountants and tax practitioners; and, small businesses, accountants and tax practitioners who prepared written submissions for this review made a particularly important contribution.

1.6 The Inspector-General of Taxation acknowledges with sincere thanks the cooperation of the Commissioner of Taxation and his staff.