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A report to the Minister for Revenue and Assistant Treasurer

3 May 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

3 May 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 research and development syndicates. 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.

The Tax Office has accepted that it took too long to resolve this issue and that its communications with taxpayers could have been better. It has also fully accepted 7 of the 10 conclusions in the report. I am also pleased that the Tax Office has accepted my recommendation to reconsider the fairness of its settlements, albeit not on the basis set out in the recommendation. In the report I have also signalled many areas in need of further improvement.

It is to be expected that from time to time the Tax Office and I will not agree on all matters. I will be discussing these matters with the Tax Office as part of the process leading up to the finalisation of my final and overall report on the Tax Office's ability to deal with major complex issues within reasonable timeframes. It is expected that this process will lead to agreed tax administration improvements that will address the main issues identified in this and the other two case studies.

I offer my thanks for the support and contribution of the many government bodies, professional bodies, business groups and individuals to this review. The willingness of many to provide their time in preparing submissions and discussing issues with myself and my staff is greatly appreciated.

Yours sincerely

[Signed]

David Vos AM
Inspector-General of Taxation


Review team

Rick Matthews, Deputy Inspector-General of Taxation
David Pengilley, Senior Adviser


© Commonwealth of Australia 2007

ISBN 0 642 74404 1

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Commonwealth.