Terms of reference
A.1.1 On 18 January 2007 the Inspector-General announced the terms of reference for his review of the underlying causes and the management of objections to Tax Office decisions. The terms of reference for this review were as follows:
This review will focus on what causes objections to Tax Office decisions and the management of objections. The Inspector-General's staff will work with the Tax Office to gain a sound understanding of the range and categories of objections with a view to determining underlying causes.
The Inspector-General will seek input and submissions from the community to understand the taxpayers' experience and perspective in relation to lodging objections.
The timeliness and quality of Tax Office approaches upstream of objections will be explored including audit, communication, and technical decision making insofar as they may be contributing to potentially unnecessary disputes and litigation.
The review will also examine objection resolution procedures and the administrative framework, including the laws that govern these areas.
This review will examine the extent and reasons for the Tax Office conceding cases after the objection process, focusing on the quality of decision making and processes employed in determining taxpayers' objections.
In the context of potentially unnecessary litigation, it would determine whether disputes (and their associated costs) could have been prevented and whether the broad system and sequence of amended assessment, objection, and dispute resolution could be improved. The review will also examine whether the current system minimises any disproportionate effects on taxpayers, in particular corporations and encourages alternative dispute resolution processes.
The review focus is not only on the Tax Office conduct and approaches to dispute resolution but also on the administrative systems established by the tax laws for resolving disputes between taxpayers and the Tax Office.
Conduct of review
A.1.2 The Inspector-General advertised the review on his website, from 18 January 2007. The review was also reported in specialist accounting and legal publications.
A.1.3 Written submissions to the review were taken from members of the public and a number of organisations.
A.1.4 Members of the review team also met with taxpayers, members of the accounting and legal professions, and representatives of various professional bodies representing lawyers and accountants.
A.1.5 The Commissioner of Taxation was asked to provide information and documents relevant to the review. Visits were made to a number of branches of the Tax Office to examine relevant files, interview relevant Tax Office staff and conduct discussions.
A.1.6 The review also took into account a number of other inquiries relevant to this review, including the Joint Committee of Public Accounts An Assessment of Tax report, the Review of Business Taxation A Tax System Redesigned report and the Administrative Review Council Internal Review of Agency Decision Making report.