A.7.1 Submissions provided the following examples of cases where the Tax Office had apparently engaged in behaviour that was prohibited by the model litigant guidelines.

Cases involving long delays

A.7.2 Examples of cases involving long delays included:

  • cases involving research and development syndicates (such as the case of Zoffanies166; and
  • cases where the Tax Office has failed to meet deadlines set by courts or tribunals.

Cases where the Tax Office had not acted consistently

A.7.3 Examples of cases where the Tax Office had not acted consistently included:

  • cases where the Tax Office was not applying agreed settlement terms to other similar cases;
  • cases where the Tax Office was not following the Taxpayer's Charter; and
  • cases where the Tax Office was relying on legal professional privilege principles but resisting the use of these principles by taxpayers.

Cases where the Tax Office had mishandled cases

A.7.4 Examples of cases which submissions stated had been mishandled by the Tax Office and which had led to unnecessary additional litigation costs for both parties to the litigation included:

  • cases where the Tax Office realised late in the litigation process that certain Tax Office documents that were an integral feature of the litigation had either not been prepared at all or had been prepared, but were defective for procedural reasons;
  • cases where the Tax Office changed the arguments it was relying on in the case during the hearing; and
  • cases where the Tax Office was reluctant to agree certain facts with taxpayers.

Cases where the Tax Office had taken advantage of taxpayers

A.7.5 Submissions stated that examples of cases where the Tax Office had taken advantage of taxpayers who did not have the same resources to pursue litigation included:

  • cases where the Tax Office had deprived taxpayers of the financial resources needed to pursue litigation by, for example, unreasonably pursuing debt recovery action against the taxpayer;
  • cases where the Tax Office had used a number of barristers and solicitors and the taxpayer is unrepresented;
  • cases where the Tax Office had made unreasonable charges for documents provided under the Freedom of Information Act; and
  • cases where the Tax Office had re-classified a case as involving fraud without any proper basis for doing so. Submissions asserted that this reclassification occurred just before the end of the four or six year time period for amendment that would normally have applied to these cases and was done so that the Tax Office could take advantage of the unlimited time period for amendment that applies in fraud cases.

Cases where the Tax Office pursued an appeal where it did not believe that it had reasonable prospects for success

A.7.6 Examples of cases provided in submissions where the Tax Office was said to have pursued an appeal where it did not believe that it had reasonable prospects for success included:

  • cases where the case was pursued because either an ATO officer or business line has developed an immutable view of the law which it was unwilling to abandon despite external counsel's advice to do so; and
  • cases where the case was pursued because the taxpayer was regarded by the Tax Office or tax officer conducting the case as engaging in undesirable behaviour and the Tax Office considered that the pursuit of the case would impede this behaviour.

Other examples

A.7.7 Submissions also raised the following other examples of possible breaches of the model litigant guidelines:

  • cases where the Tax Office had not made any effort to resolve the dispute outside the litigation process for example though mediation or other alternative dispute resolution mechanisms;
  • cases where the Tax Office had relied on technical defences for example to interlocutary questions;
  • cases where the Tax Office has demonstrated a reluctance to make any decision and this refusal has led to the taxpayer being obliged to refer the matter to either the AAT or Federal Court; and
  • cases where the Tax Office has refused to apologise for wrongdoing.

166 F C of T Zoffanies (2003) 54 ATR 280.