A.3.1 The Tax Office's full response to each recommendation, contained in Attachment 1 to this letter, has been incorporated into both the overview chapter and body of the report after each of the Inspector-General's recommendations.
SECOND COMMISSIONER OF TAXATION
Mr Ali Noroozi
Inspector-General of Taxation
GPO Box 551
SYDNEY ACT 2001
Review into the Underlying Causes and the Management of Objections to Tax Office Decisions
Thank you for your emails of 13 March 2009 and 1 April 2009 and the opportunities for discussion on this review.
We welcome the majority of the findings of the report and tout positive acknowledgement of die direction and the progress made by the Tax Office in reshaping our end-to-end dispute resolution process.
When the approximately 15,000 objections received during 2007-08 are viewed in context of the more than 3 million active compliance activities carried out in the same period, it is clear that there is currently a low level of disputation. Having said that, we also acknowledged that there are areas where we can improve.
It was pleasing that the Inspector -General's review recognised the degree of independence in our current objection process and that in complex cases there are benefits in the original decision maker or technical expert providing relevant input to the objection officer.
The Tax Office places a very high value on consistency in our decision making and, for that reason, objection review officers are not able to re-examine or re-determine a settled ATO view. However, in cases where the review officer considers that there is a genuine and well supported challenge to the correctness of a settled Tax Office view, these issues are promptly escalated to either the Tax Counsel Network or the Centres of Expertise for timely reconsideration.
The review concludes that an ideal dispute resolution system contains many facets already in place or under development within the Tax Office, such as the work underway with the integrated quality framework and with early dispute resolution.
We also appreciated the opportunity to discuss your concepts of 'genuine' and 'non-genuine' objections and we acknowledge the reasoning behind your concerns. However, we must administer the tax system as currently legislated and treat taxpayers' review and objection rights as they currently exist within that legislative framework which requires taxpayers to pursue out-of-time amendment requests by way of objections, even though there is no real dispute.
We could not comment on the first recommendation as it is a matter for Government to consider, but we have agreed to eight of the eleven recommendations directed ait the Tax Office and have agreed in part or in principle to two other recommendations. We have provided a detailed response to each of the recommendations in the attachment to this letter.
We have noted in discussions and in our response to recommendation four that we are not in a position to commit to the specific performance standards proposed in this recommendation. We agree however to review our performance standards on implementation of our new case management system, and quality framework. In addition, in implementing recommendations nine and ten we aim to identify and measure our performance against the most appropriate measures and standards that reflect reasonable community expectations in relation to the resolution of disputes, particularly objections.
We agree that a two year time frame is a reasonable period to expect progress on this matter and we welcome the Inspector-General's understanding of the variables and dependencies in this era of change and development.
General interest charge (QIC)
The Tax Office disagrees with the observations in relation to the application of the GIC. We believe that current policy appropriately addresses any instances of Tax Office delay in resolving objections and request that you alter the Tax Office response to your recommendation 5 in your final draft report to include this statement. Please see our mil response to recommendation 5 in Attachment 1.
General comment on the review
We appreciate the degree of collaboration and open discussion in conducting this review and we also welcome your understanding of both the challenges and opportunities facing us during this time of change in our workload profiles, our case management systems and our quality framework.
Thank you again for the opportunity to respond to this final draft report.
Second Commissioner Compliance
6 April 2009