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As an individual, you generally have two years in which to lodge an objection with the ATO after receiving a notice of assessment if you are a taxpayer with simple tax affairs. If you have more complex tax affairs (for example, because you have capital gains or losses), you have four years in which to lodge an objection. This period may be extended in appropriate circumstances. The ATO may also allow you to lodge objections out of time.

In some situations, you will receive an amended assessment from the ATO. In these circumstances, you may object to the amended assessment by the later of:

  • two years (if your tax affairs are simple) or four years (in other cases) of the original assessment being served; or
  • 60 days after the ATO gives you a notice of amended assessment.

A notice of objection form is available on the ATO's website.

Your objection must adequately raise the disputed issues and the grounds you are relying on for claiming that the assessment is incorrect. Statements such as "it is incorrect" or "it is excessive" will not be sufficient without evidence to support them. Should your objection ultimately come before the AAT or a court, you may be limited to arguing the grounds of objection which were sent to the ATO. Therefore, it is most important that these grounds are clearly and comprehensively discussed. For this reason, it is often desirable to have your objection prepared by a professional tax adviser.

Once the objection is sent to the ATO, it will be considered by an officer who did not make the original decision. Where the ATO has not made a decision within 60 days of the objection being lodged, you may write to the ATO requiring a decision to be made. Generally, if no decision is made within a further 60 days, the objection is deemed to be disallowed. This will enable you to pursue other remedies without further delay.

Where the ATO rejects an objection, you have 60 days in which to either:

  • apply to the AAT for a review; or
  • appeal to the Federal Court.

The Federal Circuit Court also has jurisdiction to review some administrative decisions, such as those of the ATO.

An objection will generally be heard by the Taxation Appeals Division of the AAT. However, if the amount of tax being disputed is less than $5,000, you can elect to have your claim resolved in the Small Taxation Claims Tribunal (STCT). Applications made to the AAT may be transferred to the STCT from the Taxation Appeals Division. The STCT is part of the AAT but is cheaper and encourages resolution of disputes by mediation rather than more formal rulings.

There are fees and charges payable to courts and tribunals when you apply to have a decision of the ATO reviewed. Details of these fees and charges can be found at the website of the particular court or tribunal.

If your argument with the ATO is basically one of fact, it is probably preferable to have the matter heard by the AAT. Proceedings are relatively informal and the AAT is not bound by the strict rules of evidence which apply in courts. Further, if you are unsuccessful, you will generally not have to pay the ATO's legal costs, although you will have to pay your own legal costs. The AAT has wider power than a court to review the exercise of the ATO's discretions. Hearings are conducted in private, your identity will not be published and, if you wish, you may be represented by lawyers or others.

Where the matter involves a question of law, or is regarded as a test case, it may be preferable to have the matter heard by the Federal Court, despite the formality and cost. In test cases, the ATO may undertake to pay your costs, even if the ATO succeeds in the Federal Court.

It is possible for you or the ATO to lodge further appeals with the Full Court of the Federal Court, though such appeals will be restricted to questions of law. The final stage in the appeal process involves an appeal to the High Court, which may only occur if that court gives special leave to appeal.

Burden of proof

If you make an application, you must prove that the assessment is excessive. In other words, you will not be successful merely because the ATO cannot justify its assessment of your tax liability.

Ombudsman

If you are dissatisfied with administrative action taken by the ATO, you can complain, without charge, to the Commonwealth Ombudsman. The Ombudsman has a dedicated Specialist Adviser on Taxation heading a team of experts for investigation and resolution of taxpayers' disputes with the ATO.

Complaints need not be limited to technical legal matters but may also relate to the fairness and efficiency of ATO procedures and policies. It should be noted that the Ombudsman may be reluctant to become involved in matters which are more appropriately dealt with under the objections and appeals processes.

The Ombudsman can ultimately make recommendations that the ATO reconsider decisions, explain decisions further, pay compensation or change its procedures. While these recommendations are not binding on the ATO, the Ombudsman is able to publicise such findings and report them to the Commissioner of Taxation, the Treasurer, the Prime Minister or Parliament.

Complaints may be made in writing, by phone, in person or by using the online complaints form.

Taxation Ombudsman

GPO Box 442

Canberra ACT 2601

Tel: 1300 362 072 (local call cost; calls made from mobile phones charged at mobile phone rates)

SMS: 0413 266 662 (standard carrier rates apply)

Email: ombudsman@ombudsman.gov.au

Web: www.ombudsman.gov.au

If you require more information call the number above, or visit the Ombudsman's website.

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