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A report to the Minister for Revenue and Assistant Treasurer

24 January 2007


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

24 January 2007

The Hon Peter Dutton MP
Minister for Revenue and Assistant Treasurer
Parliament House
Canberra ACT 2600

Dear Minister

I am pleased to present to you my report on findings and recommendations in respect of the review of the Tax Office's ability to identify and deal with issues concerning living-away-from-home allowances (LAFHAs). This review was announced as one of the three case studies which I would examine pursuant to my review into the Tax Office's ability to identify and deal with major, complex issues within reasonable timeframes. This report has been prepared under section 10 of the Inspector-General of Taxation Act 2003.

I have provided the Commissioner of Taxation with the opportunity to respond to the report's findings and recommendations. The Tax Office's response, including the relevant covering letter, is in Appendix 2 to the report.

The Tax Office has acknowledged that the technical and compliance issues arising in this case study took far too long to resolve. The Tax Office has also agreed with the two recommendations in respect of LAFHAs.

This report also signals possible recommendations for more systemic changes arising from this review. As I foreshadowed some time ago, it is my intention that these broader recommendations will, together with others arising from the Research and Development Syndication and Service Entity case studies, be issued as part of my final and overall report on the Tax Office's ability to deal with complex issues within reasonable timeframes. This report will be finalised once the two other case studies which form part of this overall review are completed. The Tax Office has agreed to further dialogue on this and other recommendations. This dialogue will be undertaken as part of the process leading up to the finalisation of the fourth report.

I offer my thanks to the Tax Office staff who were of assistance in this particular review, and for the support of the government bodies, professional bodies, business groups and individuals that contributed to this review. The willingness of many to provide their time in preparing submissions and discussing issues with me and my staff is greatly appreciated.

Yours sincerely

[Signed]

David Vos AM
Inspector-General of Taxation


Reviewer

Tasos Mihail


© Commonwealth of Australia 2007

ISBN 0 642 74386 X

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