2.1 The objections framework is an important part of tax administration. First, an objection enables a taxpayer to seek an internal review of a Tax Office decision. It provides an opportunity for a taxpayer to have their case reconsidered independently of the original decision maker. Second, the objection decision also provides the basis for a taxpayer to seek an external review by either lodging an application for merits review at the Administrative Appeals Tribunal or appealing to the Federal Court. Given these features, it is imperative that the objection process ensure that an objection is resolved fairly, efficiently and quickly, and that disputes do not become positional.
2.2 A common misconception is that objections are one indicator of the level of disputation between the Tax Office and taxpayers, but this is not entirely true. Currently, the objection process can be used by taxpayers to seek an amendment to their self assessed returns where they are out of time to do so under the amendment provisions.
2.3 Between 2004-05 and 2007-08 there was a steady increase in the total number of objections (excluding Aggressive Tax Planning cases) received by the Tax Office, with an increase from 12,216 to 14,627 objections received.
2.4 The review found that a major cause of objections was taxpayers seeking an amendment to their own income tax returns without any prior Tax Office-initiated action or decision. Quite often the objection process is used by taxpayers to seek an amendment to their self assessed returns where they are out-of-time to do so under the amendment provisions.
2.5 This practice has increased taxpayer compliance costs, the Tax Office's administrative costs and the time taken to effect amendments. It has militated against the objection process becoming a more efficient and effective internal review and dispute resolution system.
2.6 Over this four-year period, approximately 47 per cent of assessments that were objected to by taxpayers were varied to some extent in favour of the taxpayer by the objection being allowed in full or in part. Also, approximately 47 per cent of objections were finalised with no variation in the original assessment, either because the objection was disallowed or the taxpayer withdrew their objection.
2.7 The Inspector-General also found that the Tax Office appears to be taking more than 56 days to finalise a large proportion of routine objections which require no new information to resolve them. These include where an extended finalisation date has not been negotiated, and where (for some business lines) a significant number of these objections are essentially no more than taxpayer requests to change their self assessed tax return.
2.8 The Review of Business Taxation (the 'Ralph Review') noted in its discussion paper that the tax system that operates today had its origins over 60 years ago and since that time there have been major structural changes in the Australian tax system.1 In particular, self assessment, the electronic lodgement of tax returns and information and a binding rulings system have been introduced.
2.9 The Ralph Review expressed the view that the existing arrangements for resolving disputes, such as the objection process, were established well before the introduction of self assessment and have long passed their 'use-by date'.2 It described these processes as 'needlessly torturous, often unacceptably slow and costly, and intrinsically overly adversarial'. It recommended a shift in emphasis from adversarial structures based on objections and appeals to arrangements that employ concepts of dialogue, mediation and arbitration. The Ralph Review went on to suggest that the streamlining of dispute management should ensure that disputes are identified at the earliest possible stage and dealt with on a timely basis.
2.10 Before self assessment, taxpayers provided the Tax Office with the relevant information to apply the law and assess their liabilities. A taxpayer's primary obligation was to make a full and true disclosure to the Tax Office and the Tax Office was required to determine a taxpayer's tax liability and make an assessment. After making an assessment, the Tax Office could amend that assessment to correct errors of fact or calculation, but they could not fix their mistakes of law. Accordingly, the notice of assessment was a Tax Office decision as the law required it to examine the facts, apply the law and assess a taxpayer's tax liability.
2.11 With the move to self assessment, the Tax Office still issues notices of assessment (to create the formal obligation to pay tax), but returns are generally taken at face value, subject to post-assessment, risk-based audit and other verification processes. The issuing of an assessment has become a mechanical processing task rather than a Tax Office decision as to the taxpayer's liability. With a greater emphasis on post-assessment verification, the Tax Office is allowed to amend errors of calculation, mistakes of fact and mistakes of law after issuing the assessment and collecting the tax payable or paying a refund. Depending on the circumstances, returns may be reopened many years after the original assessment. In this way, the introduction of self assessment meant a change in the balance of costs and risk between the Tax Office and the taxpayer. The change also meant that the Tax Office's resources could be used more efficiently, so that more revenue could be collected for the same administrative cost.
2.12 It is the Inspector-General's view that the role, purpose and processes of objections should be updated to be consistent with:
- self assessment — the objections process should reflect the changes to returns processing introduced by self assessment and the consequential changes to what should qualify as a genuine dispute;
- the Tax Office's technical decision making process — acknowledging that the objection officer would be subject to the same Tax Office precedential view and cultural influences as the auditor, making it unnecessary and inefficient for an objections officer to carry out a second investigation of the same magnitude; and
- the Administrative Review Council's framework for good internal review systems.
Improvements to the management and handling of objections
Main causes of objections
2.13 The Inspector-General identified four main causes of objections:
- the objections process being used to challenge a Tax Office decision arising from an audit, default assessment, private binding ruling or where the Commissioner has failed or refused to make a decision;
- the objections process being used to effect amendments with no prior Tax Office decision or action;
- taxpayers' failure to properly respond to Tax Office requests for further information, leading to the Tax Office issuing an amended assessment; and
- the Tax Office's approach during audit.
Reasons for tax disputes being resolved
2.14 There are a variety of reasons why a tax dispute may be resolved either during or after the objection process and without recourse to litigation.3
- Taxpayers and their representatives may provide additional information either with their objection or in response to a Tax Office request made as part of considering the objection. This additional information may or may not have been requested at the earlier audit stage.
- A tax dispute could be resolved through direct negotiation between the Tax Office, the taxpayer and, where applicable, their representative. Resolution may be through settlement discussions, mediation or arbitration.
- A taxpayer may withdraw their objection (or application for review or appeal if the matter has proceeded to litigation) after having sought advice.
- A re-examination of the case during the objection or litigation stage results in a change in the Tax Office view or a different result on the application of the Tax Office view to the facts.
- A re-examination of the case considers the evidence available to support the Tax Office's decision which may lead to the conclusion that there is insufficient admissible evidence.
2.15 The last two scenarios would result in the Tax Office either allowing the objection in full or conceding or abandoning the case even if it has proceeded to litigation.
Objections limited to genuine disputes
2.16 The review found a significant number of cases where the objections process is used but there is no amended assessment or genuine taxpayer dispute with a Tax Office-initiated action or decision. The current legislative and administrative framework for the lodgement of amendments and objections allows objections to be lodged where there is no real dispute between the Tax Office and the taxpayer. For example, in out-of-time amendment request cases, this framework effectively drives taxpayers into the objections process where there is no real dispute as an objection is the only mechanism to have an administrative matter, such as a self amendment, addressed.
2.17 For example, in 2007-08 the Tax Office advised that it finalised 15,558 objections, with 9,349 of those within the Micro Enterprise and Individuals (MEI) business line. A further break-up of these numbers indicates that 2,934 of the MEI objections were extension of time requests with 78 per cent of these being allowed in full. Apart from audit and out-of-time extension requests, objections may also arise from private binding rulings, default assessments and Tax Office refusal to action a taxpayer's amendment request. The table below provides a break-up of genuine disputes across business lines.
|Business lines||Genuine dispute||Non-genuine dispute||Extension-of time requests|
2.18 Objections from genuine disputes entail different drivers, risks and taxpayer behaviours and expectations from other objections. The Inspector-General considers that objections from genuine disputes cannot be considered as simply another source of technical advice, given the fact that they represent a dispute between the Tax Office and the taxpayer and give rise to potential conflict.
2.19 Broadly, a genuine dispute is a dispute that arises from an event that the Commissioner makes a decision that adversely affects a taxpayer but that is more than simply processing a return or activity statement. Genuine disputes would include the following class of Tax Office decisions or actions:
- amended or default assessments;
- private binding rulings;
- GST assessments, or amended assessments, following an audit; and
- where the Commissioner has made a decision (for example, to cancel GST registration or disallowed an amendment request) or refused to make a decision.
2.20 The Inspector-General is of the view that the processing of a return and the issuing of a notice of assessment should not constitute a considered primary decision for the purposes of the objection system. Objections are also not an efficient mechanism for processing administrative matters such as self amendments. In instances where a taxpayer wishes to challenge a Tax Office view but chooses to lodge in accordance with the Tax Office view, then the appropriate course of action would be to seek an amendment.
2.21 The review concludes that there is a need for the objection process to reflect the changes introduced by self assessment and allow for a greater differentiation between genuine and non-genuine disputes. Consequently, this review recommends that the objection process be improved by confining objections to cases of genuine dispute between the Tax Office and taxpayers. The Tax Office has advised that the present law, including the Commissioner's general powers of administration, do not allow the Tax Office to give full effect to the differentiation of genuine and non-genuine disputes.
2.22 Taxpayers' rights to seek an amendment to correct an error or omission to their tax returns where they are out-of-time to do so should also be preserved. At the moment, this can only be done through the objection process. The Inspector-General considers that this should be achieved by updating the current amendment provisions.
2.23 Both these improvements will allow the objection process to be tailored to handling and resolving genuine disputes. Matters that are not genuine disputes (which could be more accurately described as taxpayer requests for administrative actioning by the Commissioner) should be dealt with in a more streamlined, cheaper and timely process.
2.24 In line with this thinking, the Tax Office has also been working towards adopting a more differentiated approach to objections processing as a means to improve responsiveness. This involves trying to streamline the handling of non-genuine disputes (for example, those seeking an amendment to an assessment) and take a more risk-based approach to objections processing. While this is welcomed, the Inspector-General considers that the use of the objections process for both administrative issues and genuine disputes has constrained the development of a more efficient and effective internal review system.
The Government should consider improving the objection system established by Part IVC of the Taxation Administration Act by ensuring that the objections process can only be used for genuine disputes arising from amended assessments, default assessments, private binding rulings or where the Commissioner has failed or refused to make a decision in relation to a matter in dispute. All other requests, regardless of whether the taxpayer labels them as objections, should be treated as self amendment requests.
Taxpayers' rights should be preserved by allowing the Commissioner to extend the period in which a taxpayer may amend their tax return.
Tax Office response
2.25 This is a matter for Government to consider.
Tax Office approach to objections
2.26 The Inspector-General welcomes the work begun by the Tax Office in respect of working towards reshaping its dispute resolution process while this review was being conducted. The Tax Office has also acknowledged the Inspector-General's contribution in developing a model which will inevitably result in improvements for taxpayers, the Tax Office, and tax administration in this country.
2.27 The Tax Office has acknowledged the need to take a more 'whole of dispute' approach with an emphasis on moving dispute resolution closer to the point of the original decision. It has recognised that there was a tendency in the past to focus compartmentally on the particular stage of the progression of the case (audit stage, objection stage or litigation).
2.28 The Tax Office has also acknowledged a number of indicators which suggest that there is a need to focus holistically on case management to improve its dispute resolution approach, including the number of objections that are allowed in full or in part, the number of appeals that are settled, conceded or abandoned before being heard in court or the tribunal, the poor objection processing times, and a previous piecemeal approach to improvement.
2.29 The Tax Office has recently stated that the following principles now shape its dispute resolution system:
- identification and resolution of disputes as early as possible;
- differentiated approaches to objection processing to improve responsiveness;
- use of alternative approaches to dispute resolution, as appropriate; and
- where tax litigation is inevitable, then the Tax Office is 'litigation ready'.
2.30 The Inspector-General considers that the newly stated dispute resolution principles represent an important change in the Tax Office's philosophy and approach, from one that previously viewed objections as simply one form of advice or technical decision making that is undertaken within the Tax Office to one that begins to acknowledge the true nature of a dispute between the Tax Office and taxpayers. This may span from the original decision through to final resolution — which may include objection and litigation or may be some alternative form of resolution. These principles provide a useful foundation for a more broad-reaching articulation of the Tax Office's philosophy and approach on objections and disputes more generally. However, the Inspector-General believes that the challenge ahead lies in translating these new dispute resolution principles into improvements in the day-to-day management and handling of objections and disputes.
2.31 A Tax Office statement on its philosophy and approach to objections should be issued as a public document to provide guidance to the community on how it will manage and handle objections, to help shape and reinforce an appropriate culture within the Tax Office regarding objections, to act as a yardstick of Tax Office performance, and set out clear and appropriate expectations for the community on objections.
2.32 Consistent with the views expressed in the Ralph Review, the Administrative Review Council (ARC) framework and the Commonwealth Legal Services Directions, the Tax Office's philosophy and approach to objections must emphasise the resolution of disputes through dialogue, mediation and arbitration. It should be consistent with a self assessment environment, where the original decision maker (most often the auditor) has ample opportunity to investigate a matter, request and then compel the production of further information where necessary.
2.33 The objections process should also reflect the fundamental aims of administrative practice in providing procedural justice and a review of the merits of decisions in individual cases. As such it should enable taxpayers to test the lawfulness and the merits of a decision that affects them; to ensure the timely resolution of a dispute; and to act as a necessary accountability tool by improving the quality, efficiency and effectiveness of the Tax Office's decision making process.
2.34 In aligning the objection framework with the Tax Office's business intent of optimising voluntary compliance, and with the role of internal review, the Tax Office needs to look at how it handles objections from an efficiency perspective but also the effectiveness of objections in its end-to-end dispute process. It should clearly articulate the risks associated with objections and have a differentiated approach to dealing with different classes of risk. In addition, the Tax Office needs to develop strategies and processes for objections that align with its corporate principles and the role of internal review.
2.35 The objections stage of the end-to-end disputes process must add value by providing opportunities to resolve disputes as early as possible, to narrow the issues for external review, should this be necessary, and promote the use of case conferences, the availability of mediation and settlement negotiations.
The Tax Office should finalise and issue a comprehensive public statement that sets out its philosophy on, and value-add approach to, objections including the outcomes it is seeking to achieve through its management and handling of objections. It should ensure that this public statement contains a clear commitment to the following critical elements:
- a differentiated and risk-based approach to objections handling and management;
- an emphasis on resolving disputes as early as possible and narrowing issues for potential external review; and
- the Tax Office's business intent of optimising voluntary compliance and the role of an independent internal review.
Tax Office response
2.36 Agree, noting the Inspector-General's acknowledgment (paragraphs 6.25 and 6.26) that work being undertaken by the Tax Office is addressing the recommendation.
Handling of objections arising from genuine disputes
2.37 The Tax Office should adopt work practices and procedures that align with its philosophy on and approach to objections, including its adoption of a differentiated approach to handling objections. These practices and procedures should promote risk-based approaches to the timely and effective resolution of genuine disputes.
2.38 The Tax Office also needs to bring considerations and approaches it is already taking at litigation (in an attempt to resolve the dispute without recourse to a hearing), with a view to minimising the number of genuine disputes going on to external review to only those cases where all avenues of resolution (including settlement considerations) have been exhausted.
2.39 By way of example, this review has identified two distinct scenarios of genuine disputes which require different Tax Office conduct and approaches.
2.40 The first scenario is where the objections officer determines that the original audit decision was made without all the necessary information. The objection officer should promptly request this necessary information (if it was not already included with the objection) and then re-apply the Tax Office view on the available facts and evidence. The request for necessary information at the objection stage should not be the norm, given that the Tax Office would have had ample opportunity at the audit stage to obtain all relevant information through a comprehensive investigation and to make a well-reasoned decision. The need for the objection officer to have to do so should form part of the quality control process and feedback to auditors.
2.41 The second scenario is where taxpayers have failed to respond properly to Tax Office requests for further information, which has led to the issuing of an amended assessment. The assessment may crystallise the issue for the taxpayer who may then include the requested information with their objection. If not, good administration requires the Tax Office to again seek all necessary information before proceeding to determine the objection. Following the receipt of further information, or if the taxpayer still does not respond within a reasonable period, the objection officer should promptly determine whether the Tax Office view has been correctly applied and is supportable on the available facts and evidence.
2.42 Where the objection officer determines that the Tax Office view is not supportable on the available facts or evidence or has been incorrectly applied, then the Tax Office should proceed to allow the objection.
2.43 Where the objection officer determines that the Tax Office view has been correctly applied and is supportable, then they should consider whether the dispute can be resolved through dialogue, mediation and arbitration. The Inspector-General notes that the Commonwealth Legal Services Directions also emphasise the importance of agencies doing all they can to resolve disputes without recourse to litigation. The directions state that the Commonwealth or its agencies are only to start court proceedings if other methods of dispute resolution (for example, alternative dispute resolution or settlement negotiations) have been considered. While the Tax Office does not initiate Part IVC litigation, its conduct and approach during the objections stage has an important bearing on whether a dispute proceeds to litigation.
2.44 When it is clear that a matter will not be able to be resolved by dialogue or mediation, then provision should exist for the matter to move quickly to resolution through the Administrative Appeals Tribunal (AAT) or the Federal Court. This should mean that, where the Tax Office disallows an objection in full or in part, it is satisfied that it has reasonable prospects for its decision being upheld at litigation.
Independent role of objections
2.45 Stakeholders expressed concern with the perceived lack of independence between objection officers and the original decision makers. Some suggested that the organisational structure of the Tax Office into business lines and the fact that objections are handled by the business lines impacts directly on the objection process. This is because it is more likely that the original decision maker (usually the auditor) responsible for the dispute (or tax officers closely related to the original decision maker) may also be involved in the resolution of the objection, particularly in the early stages of a dispute subject to the objection process.
2.46 Other stakeholders believed that decisions on objection were not ordinarily subject to review within the Tax Office by someone entirely independent of the officers responsible for the amended assessment to which the objection relates, and that the objection process is merely a stepping stone to real independent review. Some practitioners asserted that this gives rise to cases being litigated where the facts have not been properly collected as well as the normal human tendency to defend the position previously taken. This same concern was raised by the Joint Committee of Public Accounts, in its 1993 An Assessment of Tax report, where it noted that it was difficult to characterise the function of the internal review as one of 'independent review', given that objection officers will be subject to the same culture, corporate goals and values as the rest of the Tax Office.4
2.47 The Inspector-General found that, in most of the relatively simple cases within the Tax Office, there is an 'independent review' of decisions by objection officers with an understanding of the respective roles of the objection officer and the original decision maker, in particular where a taxpayer is able to substantiate or provide evidence of what they assert happened. The Inspector-General also found that most business line work practices emphasise the importance of ensuring independence between the objection officers and the original decision makers.
2.48 However, the Inspector-General found that the division between the respective roles of the objection officer and the original decision maker becomes blurred in more technical and complex matters. Due to the complexity of the facts or the law, there is a tendency for the objection officer to seek greater assistance from the original decision maker in understanding the facts and evidence and in seeking to make a decision. The Inspector-General also notes the stakeholders' sentiments and perceptions that there is a greater need for the objections function to be seen as an independent review and separate from the business lines. Clearly, the stakeholder feedback to date does not suggest that current management and handling of objections is perceived as being independent or impartial.
2.49 The Tax Office's current organisational arrangements generally satisfy the ARC framework, with a division between officers handling audit work and those handling objections. However, the Inspector-General believes that the Tax Office has to take further steps, along the lines suggested by the ARC, to reinforce the role of objections in tax administration and to promote its independent character.
2.50 The Tax Office also needs to place greater importance on culture in promoting independence in the objection process. The ARC emphasised the key role of management in promoting the importance of internal review.5 It commented that it is important for management to send a strong message to staff as a whole and the community that the role of objection officers is different from mainstream operational objectives. The Joint Committee of Public Accounts also considered that, to the extent that an objection officer is seen to be culturally bound to determine a matter in favour of the Tax Office, means that 'internal review' is fundamentally flawed as a process of 'independent' review.6
Reconsideration of the Tax Office view at objection
2.51 A common theme in submissions was that the current objection process seems inherently incapable of resolving a dispute a taxpayer may have with the correctness of the Tax Office's position on a particular matter of law, leading to increased costs and delay in resolving a dispute. Some commentators observed that in such instances objections are likely to be a shallow exercise as the objection officer is unable to depart from the prevailing Tax Office view, and their major function will be limited to ensuring that the original decision maker has applied the Tax Office view correctly.7
2.52 It was suggested that the objection process should be able to resolve disputes according to the law, whether complex or simple. Currently, there is a risk that the objection process amounts to no more than ensuring that current Tax Office policy has been applied and enforced, even though this may not always be the correct position at law. It was submitted that the Tax Office should implement measures that improve the likelihood of achieving the correct legal outcome at the objection stage.
2.53 Objection officers are constrained in their decision making as they are required to apply the established precedential Tax Office view, even though the taxpayer may disagree with the correctness of this view, and it was the same view that was applied by the original decision maker during audit. Importantly, objection officers are not able to re-examine or redetermine the Tax Office view. This responsibility lies with the Tax Counsel Network (in relation to priority technical issues) and the Centres of Expertise (establishing precedential view) and is designed to ensure consistency in the Tax Office's decision making.
2.54 Where the objection officer believes that there is some question about the technical correctness of the Tax Office view, or concern that the view produces an anomalous or unintended outcome, then there is a requirement that the issue be escalated to senior technical officers.
2.55 The Tax Office has established processes which rightfully place a very high value on consistency in its decision making role. The Inspector-General does not believe that objection officers should be able to unilaterally re-examine or redetermine the Tax Office view as this will lead to potential inconsistent treatment of taxpayers. Rather, it is appropriate that where challenges are made to the correctness of a Tax Office view, then these issues are promptly escalated to either the Tax Counsel Network or the Centres of Expertise for timely reconsideration.
2.56 As was noted by the Joint Committee of Public Accounts, it is important that the Tax Office demonstrate a willingness to accept, evaluate and critically respond to taxpayer submissions on all aspects of administration and interpretation.8 Where such escalation occurs, then it is necessary that the earlier technical decision is subject to review by a person of sufficient authority.
2.57 If the Tax Office view is to be maintained, then it is important that the objection is quickly determined and that the taxpayer is provided with reasons for the decision so as to be able to understand why a particular position on the Tax Office view, or the application of that view, has been maintained. This will then allow the taxpayer to properly determine whether to exercise their external rights of review and appeal.
2.58 If such a matter does proceed to litigation, and there is no additional information either provided by the taxpayer or requested by the Tax Office, then compensation for defective administration could be warranted for litigation costs incurred by taxpayers where the Tax Office subsequently concedes or abandons the case. The Inspector-General believes that the Tax Office should seek to take into account such considerations as part of its new dispute resolution system.
2.59 The Inspector-General considers that the following recommendation, which sets out a number of work practices and considerations, will promote the independent character of objections and allow for a timely reconsideration of a disputed Tax Office decision.
The Tax Office should continue to develop work practices and procedures that recognise and respect the role of objections within an end-to-end dispute environment and promote a culture consistent with the function of internal review. The Tax Office should ensure that its work practices and procedures incorporate the following measures to implement these arrangements.
- The respective roles of the original decision maker and objection officer are set out to ensure that they are understood and adhered to.
- Objection officers promptly consider whether the Tax Office view is correct and supportable on the available facts and evidence.
- Objection officers consider whether alternative approaches to dispute resolution, such as settlement or mediation, may be appropriate, how the dispute could be resolved without recourse to litigation, when escalation should occur and when case-conferencing could be appropriate. This should also involve providing expertise to assist objection officers in determining what approaches to use with specific cases.
- A fast-tracked process to external review be made available that would allow an objection decision to be expedited where resolution of the dispute at the objection stage is unlikely as it deals with the Tax Office view of the law (as expressed in a ruling, determination or other interpretative advice) and the facts are agreed.
- Where an objection officer has sought input from the original decision maker on material facts, evidence or technical view, and the objection officer is likely to disallow the objection, the taxpayer is given an opportunity to respond on these material facts, evidence or technical view.
- Objection officers have the skills and authority to decide the objection, or the ability to access appropriate skills and escalate the case to a person of sufficient authority where required. Where the Tax Office's technical view is challenged, this should result in its reconsideration by a person of sufficient technical authority.
- Appropriate training is developed for objection officers in line with its philosophy and approach on objections in the context of its end-to-end dispute resolution system.
Tax Office response
2.60 Agree, noting the Inspector-General's acknowledgment (paragraphs 6.55 to 6.60 inclusive) that work being undertaken by the Tax Office is addressing the recommendation.
Alignment of time frames with self assessment environment
2.61 In its submission, the Ombudsman indicated that one of the more common areas of complaint with respect to the objection process is delay. The submission stated that the Ombudsman's investigations suggest that there is ongoing scope for the Tax Office to improve its administration in particular instances to minimise the potential for unnecessary delay and inadequate communication with the taxpayer and their advisers.
2.62 The Taxpayers' Charter sets a '56-days available-to-the-Tax Office or as otherwise negotiated' standard (the 56-day finalisation standard) for the finalisation of objections not arising from a private binding ruling request and a 14-day standard for further information requests. A 'stop-the-clock' mechanism applies for the 56-day standard where the Tax Office is awaiting further information from a taxpayer or where the Tax Office has requested further information.
2.63 The Tax Office also measures its performance against a 120-day standard for the completion of objections (the 120-day completion standard), although this is not a Taxpayers' Charter standard. The 120-day completion standard measures the total time (elapsed days) taken to finalise an objection irrespective of Tax Office or taxpayer delays.
2.64 This review found that a significant proportion of objections (79 per cent) are finalised within the 56-day finalisation standard, which exceeds its 70 per cent benchmark target. The Inspector-General notes that this performance achievement is influenced by the high number of extension-of-time requests and other non-genuine disputes and that the performance achievement may be significantly lower if only genuine disputes are included in the measure. Also, stakeholders suggest that they are somewhat powerless if the Tax Office requests an extension of time to finalise a dispute as they do not necessarily want to proceed to litigation.
2.65 The Tax Office's 56-day finalisation standard is the lowest of its suite of performance standards and the same as its standard for processing paper amendments to tax returns. This may be a remnant from pre-self assessment days and from a time when Tax Office processing was predominantly paper-based rather than electronic. It is not in line with its standard for objections to private binding rulings, which is 28 days and for which the Tax Office's performance exceeds its 88 per cent benchmark.9
2.66 It should be emphasised that these Tax Office performance results represent instances where the delay in the finalisation or completion of the objections can be attributed solely to Tax Office action or inaction. This is because for the 56-day finalisation standard there is a 'stop-the-clock' mechanism if the Tax Office is awaiting information from a taxpayer or there is taxpayer delay.
2.67 A fairly constant proportion of objections have met the 120-day completion standard over the last three years (71 per cent), which is considerably below the Tax Office's benchmark of completing 99 per cent of objections within the 120-day elapsed timeframe irrespective of further information requests. The Tax Office's corporate Heartbeat report shows that the reasons why objections exceeded the 120-day completion standard include requests for further information, internal technical advice or awaiting a court or tribunal decision.
2.68 For some business lines, there is a significant difference between the proportion of objections that meet the finalisation standard and those meeting the completion standard. This might be due to the Tax Office negotiating longer than 56-day finalisation timeframes with taxpayers, or it might be due to taxpayers taking a long time to meet requests for more information.
2.69 The Inspector-General considers that, in the context of confining objections to genuine disputes (which would reduce current numbers), the administrative performance standards need to be revised to bring them into line with a self assessment environment and with the recent changes introduced as a result of the Report on Aspects of Income Tax Self Assessment (RoSA).
2.70 In its Better Decisions report, the ARC also concluded that as a general principle time limits should be introduced for internal review, in order to reduce the potential prejudice to clients that can result from lengthy delays in internal review. It noted that generally a 28-day limit would be appropriate, although this could be modified in appropriate circumstances.10 It also stressed that internal timeliness standards should be adopted using an appropriate balance between realism and responsiveness to the community, and that workloads for internal review officers should be designed to allow the deadlines to be met.11
2.71 The Inspector-General believes that following the implementation of the Recommendation 1, there would be increased scope for the performance standard for the finalisation of objections being reduced to '28-days available-to-the-Tax Office' for a significant number of objections. This would arise from the following:
- better utilisation of objection resources, with objection officers no longer having to handle out-of-time amendment requests;
- all objections would be from amended assessments, default assessments, private binding rulings or where the Commissioner has failed or refused to make a decision in relation to a matter in dispute. This will mean that the Tax Office would have had an opportunity to obtain all relevant information and make a well-reasoned decision. Upstream work practices and approaches should ensure that the Tax Office is able to meet this commitment; and
- nearly 95 per cent of all objections are classified as routine, with the rest being classified as complex.
Over the next two years, the Tax Office should work towards revising its performance standard for the finalisation of objections from the current 70 per cent in 56 days to 85 per cent in 28 days in line with other relevant Taxpayers' Charter and Tax Office standards.
Tax Office response
2.72 Agree in part.
2.73 The Tax Office is committed to reviewing our performance standards to improve services to the community. However, we are not in a position to commit to the standards specified in this recommendation. We plan to have made appreciable progress over the next two years; however, the rate and extent of change is dependent on a variety of matters, including those mentioned at paragraph 6.71 of the Inspector-General's report.
2.74 The Inspector-General notes that the Tax Office's successful implementation of this recommendation is dependent upon the objection process being confined to only genuine disputes and it completing the migration of its objection workload to its new Siebel case management system. For these reasons, the Inspector-General accepts that the implementation of this recommendation would occur over a reasonable period of time.
2.75 The recommendation also makes an allowance for complex objections and assumes that up to 15 per cent of all objections will fall into this category (such objections currently represent only 5 per cent of all objections). For such objections, the Inspector-General believes that a '56-days available-to-the-Tax Office or as otherwise negotiated' performance standard would remain in place. However, given that the most complex objections will arise from the large business and small to medium enterprise taxpayers, where there would have been far greater engagement and interaction at the audit stage, then objection officers should promptly consider whether a fast-tracked process for determining the objection is appropriate. This will be particularly relevant for objections where the facts are agreed and the dispute is about the Tax Office view.
Tax Office delay
2.76 The Inspector-General considers that it is not fair and reasonable that the General Interest Charge (GIC) be imposed where there has been Tax Office delay in finalising an objection. The Inspector-General considers that the Tax Office should remit the GIC where it delays finalising an objection, or where it seeks information at the objection stage that it should have requested during audit. Remitting GIC in these circumstances would be consistent with the underlying policy intent of the legislation, especially after RoSA.
2.77 There are a number of strong grounds from a fairness perspective for the adoption of such a position. First, section 8AAG of the Taxation Administration Act 1953 (TAA) provides the Tax Office with the broad power to remit GIC in certain circumstances. This includes where the delay in payment was not caused by the taxpayer and the taxpayer has taken reasonable action to mitigate the delay. In addition, the Commissioner may remit all or a part of the GIC if he is satisfied that there are special circumstances because of which it would be fair and reasonable to remit all or a part of the charge, or it is otherwise appropriate to do so.
2.78 Second, and consistent with the approach adopted by RoSA in relation to the Shortfall Interest Charge (SIC), remission should generally occur where circumstances justify the revenue bearing part of the cost of delayed receipt of taxes. Such circumstances would include delay, contributory cause or fault on the part of the Tax Office in finalising an objection and where the taxpayer has acted in good faith.
2.79 One example of when remission would generally be appropriate is where the Tax Office has taken longer to finalise an objection than could reasonably have been expected, having regard to all the facts and circumstances of the case.
2.80 The Inspector-General is of the view that a reasonable, maximum period of time to finalise an objection would be 60 days 'available to the Tax Office' after the objection was lodged, consistent with the rights of taxpayers to give the Commissioner written notice requiring an objection decision to be made. Remission of the GIC would then apply for time taken by the Tax Office to finalise the objection beyond this 60 days 'available to the Tax Office' period.
2.81 In line with the Tax Office's position in Practice Statement PS LA 2006/8, where the taxpayer unreasonably delays, obstructs or obfuscates the progress of an objection, and the objection is finalised beyond the 60 days 'available to the Tax Office' period, then remission will not generally be warranted. Examples of such conduct include:
- repeated failure by the taxpayer to keep appointments or supply information; or
- repeated failure by the taxpayer to respond adequately to reasonable requests for information. This will include excessive or repeated delays in responding, not replying to the request for information, giving information that is not relevant or does not address all the issues in the request or supplying inadequate information. This would include circumstances where the taxpayer has failed to reply to further information requests during audit and subsequently provides that additional information during the objection stage.
2.82 A stop-the-clock mechanism should apply where the Tax Office is awaiting further information from a taxpayer or where the Tax Office has requested further information within the 14-day service standard period. If information is not requested within 14 days, the full period up to the time the request is made should count towards the 60-day maximum interest period.
2.83 As part of the objections acknowledgment letter, taxpayers should be informed of their right to compel the making of an objection decision within 60 days, pursuant to section 14ZYA of the TAA.
2.84 Where the Tax Office first requests further relevant information at the objection stage, and it would be expected that this information should have been requested during audit, then the Tax Office should consider whether the remission of the GIC to the SIC rate is appropriate. Again, in circumstances involving blatant obstruction, delays or obfuscation this remission should not apply.
The Commissioner should remit the general interest charge for the time taken by the Tax Office to finalise an objection beyond a 60-day 'available to the Tax Office' period where the taxpayer has acted in good faith.
Tax Office response
2.86 The Tax Office's ATO Receivables Policy currently provides a broad and well balanced approach to the recovery of disputed debt and the remission of GIC, and appropriately addresses any instances of Tax Office delay in resolving objections. Remission decisions will be based on all the facts and circumstances of the case and will not follow any pre-determined formula.
Personal contact with taxpayers
2.87 Stakeholders submitted that opportunity for communication and discussion between taxpayers, their representatives and objection officers is limited, making it more difficult for the parties to engage in discussion which might assist in the early resolution of the matter. It was suggested that to avoid incurring unnecessary costs in escalating the matter to the litigation stage, the preference is for an opportunity to discuss and settle issues with the Tax Office at the objection stage. The ARC Internal Review Best Practice Guide12 recommends that agencies should encourage internal review officers to attempt to contact all applicants as a matter of course and those internal review officers should be allocated enough time per review for this to be possible.13
2.88 The Inspector-General believes that the Tax Office's current communication strategies at the objection stage fall short of the ARC Internal Review Best Practice Guide standards. Stakeholder submissions confirm this view.
2.89 The objection stage should be an opportunity for communication, discussion or personal contact between taxpayers, their representatives and the Tax Office. This would also reinforce the role and independence of the objection officer.
2.90 Along the lines of what is undertaken by the Administrative Appeals Tribunal when a dispute proceeds to external review, this would require an objection officer and the taxpayer or their representative, where practicable, to discuss the issues in dispute, identify any further material that parties may wish to obtain and explore whether the matter can be settled. In appropriate instances, case conferences would also provide an opportunity to discuss the future conduct of the objection and, in particular, whether another form of alternative dispute resolution may assist in resolving the matter. Objection officers should also take this opportunity to explain the role of objections and its independence from the audit process. This should occur in the early stages of the objection decision making process.
In the early stages of the objection process:
- the Tax Office should continue to encourage objection officers to contact taxpayers with the view of exploring opportunities for early resolution of the dispute; and
- where it could be of some benefit in resolving a dispute, the Tax Office should continue to adopt the practice of case conferencing, in which the objection officer, the taxpayer and Tax Office technical experts discuss the issues in dispute.
Tax Office response
2.91 Agree, noting the Inspector-General's acknowledgment (paragraphs 6.95, 6.99 and 6.100) that work being undertaken by the Tax Office is addressing the recommendation.
2.92 The ARC stressed the importance of quality control systems to ensure that internal review was meeting its aims. Some quality control systems suggested include quality assurance processes, maintaining statistics of the number of reviews, timeliness standards, the success and failure rates of appeals, general scrutiny by management and the provision of feedback to original decision makers and management.14
2.93 The Inspector-General found that the Tax Office already has in place a range of quality control systems. This includes the requirement for completed objection decisions to be sent to an authorising officer for quality assurance before the final letters are sent to the taxpayer and the Tax Office's key quality assurance process for objections, namely its bi-annual Technical Quality Review (TQR).
2.94 However, the Tax Office recognised that the TQR process does not review all aspects of the end-to-end decision making process and work was initiated as early as mid-2004 to develop and implement an improved quality review process. Some of the shortcomings identified in the TQR process included the need to identify root causes of quality gaps, providing better feedback to case and approving officers and identifying technical and procedural 'hot spots'. In addition, the Inspector-General has found that the TQR process does not adequately measure and report the quality of objection decision making. Objection decisions are simply included in the sample category of technical advice decisions to be included in the TQR process. There is no individual reporting of the TQR results for objections and the TQR process does not adequately measure the quality of the end-to-end dispute.
2.95 Moreover, notwithstanding a very high 'A' and 'Pass' rating for technical advice decisions, which include objections, a significant proportion of objections that proceed to external review are settled or conceded by the Tax Office before going on to a hearing. For instance, in 2007-08 approximately 51 per cent of all non-scheme cases were settled wholly or partly in favour of the taxpayer, with a further 25 per cent being conceded or abandoned by the Tax Office. Of the settled cases, approximately 41 per cent of the primary tax in dispute and just over 90 per cent of penalties in dispute were adjusted in favour of the taxpayer.
2.96 The ARC suggested that one way in which the success of internal review mechanisms can be determined is by monitoring the rates of applications for external review.15 Likewise, in her paper Justice O'Connor suggested that a high settlement rate of matters before the Administrative Appeals Tribunal is an indication that the filtering effect expected at the first tier of review is not working effectively.16 The Inspector-General found no evidence that the rates of application of external review and its outcomes were being used as an indicator of the quality and effectiveness of the objection process.
2.97 The Tax Office accepts that there is a need for improvements in the current TQR process so as to better measure the quality of the end-to-end dispute resolution process, of which the pre-amendment and objection stages are critical stages. As a result, an Integrated Quality Framework (IQF) has been designed. The IQF has been implemented for in-scope interpretative assistance products including objections.
The Tax Office should continue with its development of the Integrated Quality Framework and ensure that the quality control system:
- includes features to properly evaluate the quality of the Tax Office's end-to-end decision making process;
- is applicable to key objection work practices;
- includes mechanisms for objection officers to provide and receive feedback as a means to improving the decision making processes;
- identifies whether critical objection work practices that assist in the resolution of disputes are being followed and applied consistently across the business lines; and
- includes examination and analysis of further information requests to ensure that relevant information is sought at the earliest opportunity.
Tax Office response
Information exchange and interaction with taxpayers
2.99 The Tax Office's information management system indicates that approximately 60 per cent of objections did not require further information prior to finalisation. Where there was a further information request, then over three-quarters of such cases failed the Taxpayers' Charter further information request standard. The Inspector-General found that in a large number of cases the receipt of new information was an important factor in the outcome of the objection. New information became available either through the taxpayer providing further material with the lodgement of the objection or the Tax Office requesting further information in the course of determining the objection.
2.100 These findings raise two questions — firstly, why do so many further information requests fail the Taxpayers' Charter service standard and secondly, why is relevant information not provided or obtained earlier in the dispute?
2.101 Audit work processes and the quality of decision making at the primary decision maker level, particularly with regard to evidence collection and the giving of reasons, have an important bearing on the management and handling of objections. Where an audit decision does not clearly set out the relevant issues or facts or the evidence that is being relied upon to support those facts, then it will be difficult for the objection officer to quickly determine what further information is both relevant and required.
2.102 In regard to the second issue, the Inspector-General found that either there was no request for that relevant information at the audit stage or, if it was requested, then it was not provided by the taxpayer.
2.103 As noted by the ARC, there is an inevitable tension between the aims of fairness and correct decision making, and the aim of efficiency in relation to the amount of time taken in undertaking the review and the resource cost of such a review.17
2.104 Where the Tax Office has requested further information from a taxpayer and provided a reasonable period of time to provide that information, then it should not be making multiple information requests. The Inspector-General does not believe there is any benefit to have a large number of cases awaiting further information for long periods of time. Taxpayers, when they lodge an objection, have an obligation to provide all necessary and relevant information.
2.105 In circumstances where taxpayers have not provided the requested information, then the Tax Office should be seeking to review the case based on the best available facts and evidence and to make a timely decision so as to determine the objection. In such instances, simply determining the objection on the best available facts and evidence and allowing taxpayers to explore their external review rights if they are still dissatisfied would be an appropriate course of action. Where this happens the Tax Office should be able to flag these cases as potential litigation.
2.106 The Tax Office also needs to include a more thorough examination and analysis of further information requests as part of its quality assurance processes for objections. It needs to better understand why relevant information is either requested by the Tax Office, or provided by taxpayers, at later stages in the dispute. It must also be confident that it has requested relevant information at the earliest stage possible. Where a dispute is resolved because of further or new material at later stages in the dispute (objection or litigation), then the Tax Office should be able to attribute that to a failure by the taxpayer to provide information rather than the Tax Office not asking for it. Such an assurance should be included as part of its broader quality control system.
2.107 The Inspector-General considers that it is incumbent on the Tax Office to make clear in its further information requests why the information is relevant and how it relates to the issue in dispute. This would benefit both the Tax Office and taxpayers and encourage a more timely resolution of disputes.
2.108 Further information requests examined in the course of this review tended to set out the class or name of the document or information being requested with little or no explanation of the purpose or importance of that information in resolving the dispute. It is also important that the Tax Office provide assistance to taxpayers, especially those that are self represented, to strengthen their applications for internal review. Such assistance could take the form of pointing out obvious gaps or omitted detail in applications for review, explanations of the review process and explanations of how the objection could be successful.
The Tax Office should continue to implement work practices and procedures that address the following:
- when asking for information during objections, the Tax Office should ensure that information requests are tailored to the dispute on hand by clearly articulating the type of information it is seeking and the purpose and relevance of the information to the issues under examination;
- self represented taxpayers in particular should be provided with plain language advice on making objection applications and assistance in ensuring that all relevant information and evidence is before the objection officer for reconsideration of the earlier Tax Office decision; and
- communications between the objection officer and the taxpayer should also be aimed at improving understanding of the reason for the objection to facilitate early resolution of the dispute.
Tax Office response
2.109 Agree, noting the Inspector-General's acknowledgment (paragraphs 6.153 to 6.157 inclusive) that work being undertaken by the Tax Office is addressing the recommendation.
Reporting and analysis of objections
2.110 The Inspector-General considers that as part of setting out its philosophy and approach on objections in the context of its end-to-end dispute resolution system, the Tax Office should establish indicators to evaluate the quality, efficiency and effectiveness of its management and handling of objections. These indicators should include both quantitative and qualitative measures and allow the Tax Office to know whether its stated objectives and outcomes have been achieved. The performance of the Tax Office in meeting these indicators should be the catalyst for improvements, not only in objection processes, but also in upstream processes that have an impact on objections.
2.111 At the corporate level, the Inspector-General found that there is a large quantity of information being reported at different levels of the Tax Office (aged case status reports, certain performance standards reports and technical quality review reports). However, the Inspector-General believes that the Tax Office should supplement its important focus on efficiency and cycle times with information evaluating the effectiveness of its management and handling of objections, and its operation in the context of the Tax Office's end-to-end dispute resolution process. This requires the Tax Office to develop a range of measures and indicators that allow it to assess and report on how well it has performed in achieving the stated outcomes of objections.
2.112 The Tax Office's current reports do not provide an accurate account of the true level of disputation given the inclusion of non-genuine disputes such as out-of-time extension requests and amendment type objections. The Inspector-General considers that it is important for the Tax Office to be able to accurately report on the level of disputation in the tax system, the source of that disputation (primary tax versus penalties) and the respective outcomes. This is not only important from a compliance perspective in terms of identifying how well targeted and successful the Tax Office's active compliance activities are, but also from the perspective of appropriate resource allocation and utilisation. The Inspector-General notes that the exclusion from the objections process of non-genuine disputes, as set out in Recommendation 1, will allow for a more accurate determination of the level of disputation in the tax system.
2.113 For transparency, the Tax Office should make publicly available a more complete picture of the nature and level of disputation in the tax system and its performance in the management and handling of objections.
Aligned with the Tax Office's philosophy, approach and agreed outcomes on objections, the Tax Office should continue to design, monitor and report against a broad range of indicators and measures that allow it to evaluate the quality, efficiency and effectiveness of the objections function within its end-to-end dispute process. Some of these measures and indicators should be reported externally, where appropriate, with consideration being given to:
- the level of disputation in the tax system including the source, cause and nature of objections;
- all its service standards (completion and further information requests) included in the Tax Office's annual report;
- outcomes; and
- age profiles.
Tax Office response
2.114 Agree in principle.
2.115 The Tax Office already reports against a broad range of indicators and measures including some of those suggested in the recommendation. In our ongoing work to improve reporting measures, we will give careful consideration to the Inspector-General's suggestions and we note the Inspector-General's acknowledgment (paragraphs 6.170 to 6.174 inclusive) that work being undertaken by the Tax Office is addressing the recommendation.
Analysis and feedback
2.116 The ARC noted that the analysis of statistics of internal review reversal rates can be used, among other purposes, to monitor trends, identify problems in policy and legislation, and identify training needs.18 Such statistics are a useful tool that can be used by agencies to maximise the normative impact of internal review.
2.117 The ARC also observed that the ultimate aim of a dispute resolution system must be to improve original decision making and listed a number of problems identified through internal review. The ARC Internal Review Best Practice Guide recommended that internal review officers should be encouraged to communicate with original decision makers, and their managers, about problems that they may have detected with administration and decision making.19 It considered that contact between internal review officers and original decision makers is important in fostering cultural acceptance of internal review decisions and facilitating the improvement of original decision making.20
2.118 The Inspector-General found that there was limited Tax Office analysis from a corporate perspective that aimed to bring together the current reported information to identify trends and problems in the objection process and the broader dispute resolution framework. As part of this analysis the Tax Office should investigate the cause, source and nature of disputes and how it could instigate proper remedial action. This should include a thorough analysis of litigation outcomes so as to identify why a dispute was resolved prior to hearing and why it could not have been resolved earlier at the objection stage. The Inspector-General also considers that there is scope for the Tax Office to improve its internal feedback mechanisms. These feedback mechanisms should be targeted at improving all facets of the end-to-end dispute resolution system, including the quality, efficiency and effectiveness of the Tax Office's objection process.
The Tax Office should adopt a more corporate emphasis and better analyse the trends and outcomes of objections and litigation as a source of improvement of its end-to-end dispute resolution process and feedback to both objection officers and primary decision makers. This analysis should include the identification of potential systemic issues in the end-to-end dispute resolution process and the effecting of improvements.
Tax Office response
2.119 Agree, noting the Inspector-General's acknowledgment (paragraphs 6.170 to 6.174 inclusive) that work being undertaken by the Tax Office is addressing the recommendation.
Pre-amended assessment work practices
2.120 This review found that the Tax Office's actions during audit activities have an important bearing on the number of taxpayers objecting to Tax Office decisions. If the Tax Office does not ensure that these pre-amended assessment work practices encourage the correct identification of the facts, evidence, issues and application of the law or promote direct communication between the taxpayer and the Tax Office with the view of resolving the dispute, then it will lead to cases unnecessarily going on to objections. The Tax Office must also ensure these work practices are being properly followed by staff. In addition, the ARC observed that the prospect of internal review can sometimes have a negative impact on decision making, with the availability of an appeal sometimes being used as an excuse for less than thorough work or a failure to deal properly with a dissatisfied person.21
2.121 It is important that these pre-amended assessment work practices adequately support the role and aims of objection. The Ralph Review emphasised the need for an administrative regime that is seamless and keeps disputes — and their associated costs and delays — to a minimum. It suggested that processes need to be considered on an integrated — that is, a 'whole-of-transaction' — basis, in order that the best possible administrative regime can be designed and implemented.22 Audit work practices need to align with and adequately meet the needs and expectations of the objections process. In turn, the work, practices and outcomes of objections need to properly feed into litigation. This means that reworking, duplication of tasks or having to rectify less than thorough work from the early stages should not occur.
2.122 In the course of the review, the Inspector-General found evidence of staff not complying with the requirements of the audit work practices to provide interim findings to taxpayers, to formally discuss the audit findings with the taxpayer and to conduct an exit interview.
2.123 The Tax Office should ensure that it has adequate quality control mechanisms around these critical upstream points. This could include managerial sign-off, improved quality review processes and information technology system features to ensure that the Tax Office's work practices are being followed and applied consistently across business lines.
The Tax Office should review its current audit work practices and training programs in relation to the role of original decision makers to ensure that they align with the Tax Office's philosophy and approach to end-to-end dispute resolution and that they conform appropriately to the Administrative Review Council Best Practice Guides. In particular, the Tax Office should identify critical audit work practices that can have significant implications for dispute resolution at the objection and litigation stages. It should also encourage open and direct communication between the parties and the timely exchange of information and views.
Tax Office response
2.125 The Tax Office's current audit work practices and training programs have been designed in accordance with sound administrative principles. However, we agree to conduct a review of these practices and programs to consider the matters raised in your recommendation.
The Tax Office should continue with its development of the Integrated Quality Framework and ensure that the quality control system:
- adequately measures and provides for the continuous improvement of the overall quality of original decision making;
- includes identifying whether critical audit work practices and processes are being followed and applied consistently across business lines;
- assesses how well original decision makers have identified and considered the issues, the relevant facts, the reliability and weight of evidence supporting the findings of facts and the application of the law; and
- includes a causal analysis of quality in relation to the end-to-end process, so that comparisons between audit and related objection decisions can be undertaken, including an evaluation of the effect of internal review on original decision makers so as to minimise the potential negative effects of internal review.
Tax Office response
1 Review of Business Taxation (Ralph Review), A Strong Foundation, November 1998, p 119.
2 Review of Business Taxation (Ralph Review), A Tax System Redesigned, July 1999, p 147.
3 Based on Tax Office response in National Tax Liaison Group Minutes, Item 20, 17 June 2008.
4 Joint Committee of Public Accounts (JCPA), Report 326: An Assessment of Tax, 1993, p 325.
5 Administrative Review Council (ARC), Report No. 44: Internal Review of Agency Decision Making, November 2000, paragraph 6.46.
6 JCPA, An Assessment of Tax report, p 325.
7 Gumley W, 'The Taxation Appeals System: An Administrative Law Perspective', Monash University Working paper 96/5, 1996, p 10.
8 JCPA, An Assessment of Tax report, p 326.
9 This standard has been temporarily reduced to 85 per cent during the implementation of the Change Program between 2007 and 2009.
10 Administrative Review Council (ARC), Report No. 39: Better Decisions: review of Commonwealth Merits Review Tribunals, 1996, paragraph 6.57.
11 ARC, Internal Review of Agency Decision Making, Recommendation 24, p 69.
12 Chapter 8 of the Administrative Review Council's Internal Review of Agency Decision Making report is in the form of a Best Practice Guide, aimed at giving agencies the opportunity to re-examine their internal review systems with a view to improving them, referred to as the Internal Review Best Practice Guide.
13 ARC, Internal Review of Agency Decision Making, Recommendation 21, p 69.
14 ARC, Internal Review of Agency Decision Making, paragraph 6.37.
15 ARC, Internal Review of Agency Decision Making, paragraph 6.40.
16 O'Connor DF, 'Effective Administrative Review: An analysis of two-tier Review (1993) 1 Australian Journal of Administrative Law 4.
17 ARC, Internal Review of Agency Decision Making, paragraph 5.16.
18 ARC, Internal Review of Agency Decision Making, paragraph 6.36.
19 ARC, Internal Review of Agency Decision Making, Recommendation 36, p 71.
20 ARC, Internal Review of Agency Decision Making, paragraph 7.16.
21 ARC, Internal Review of Agency Decision Making, paragraph 7.9.
22 Ralph Review, A Tax System Redesigned, p 146.