Ten frequently asked questions
We operate in a commercial environment where the Australian Taxation Office's (ATO's) processes and activities increasingly probe businesses for compliance. Enquiries may take the form of a risk review which may evolve to an audit and ultimately, a dispute.
A review or dispute with the ATO can be a stressful time. The key to successfully managing the review or dispute is to know your rights and establish appropriate protocols.
Below are ten frequently asked questions that may help you plan for a positive outcome:
How should I handle a dispute?
It is important that you co-operate with the ATO and provide timely responses to information requests. You should also ensure that you maintain your rights under formal dispute mechanisms as well as considering informal dispute resolution, negotiation and settlement.
Do I have to give the ATO all of the information requested during a dispute?
No, there are certain categories of information which revenue authorities cannot force you to provide. Generally, documents which are irrelevant to the dispute, subject to legal professional privilege or claimed under the accountants' concession can be withheld. It is important that documents of this nature are easily identified.
Am I legally obliged to answer all the questions asked by the ATO during a dispute meeting?
No, only questions you are comfortable with should be answered. To provide well planned answers, it is advisable to request a list of questions prior to the meeting.
Can I stop the ATO from contacting me directly?
Yes, at your initial meeting with the ATO you can request all future queries be directed to your designated representative.
How long do I have to object to an assessment?
You have 60 days (not two months) to lodge an objection against an assessment issued by the ATO. If you lodge an objection outside of this period, you will have no further avenues to dispute the assessment.
How long do I have to lodge an appeal from the time of an objection decision?
You have 60 days from the issue of the objection decision to lodge an objection against an assessment issued by the ATO.
Should I choose a tribunal or a court to hear my appeal?
Tribunals are generally cheaper and less formal than the courts. However, a court is more appropriate where an issue is legally complex and there is a strong risk of appeal.
If requested, do I have to provide data in electronic format?
If the ATO gives you a formal notice that stipulates documents are to be provided in a specific format, you are legally required to comply. In comparison, there is some scope for movement in relation to informal requests. In both instances, it is advisable that you clarify the purpose of the request and how the ATO will use the information.
What can I do if I find an error during or before an audit?
If you make a mistake in relation to your tax affairs then you can make a voluntary disclosure. The advantage of making a voluntary disclosure is to minimise penalties and interest.
At what point should I consult a professional tax advisor?
It is imperative that you consult a professional tax advisor when you first become aware that a review or audit is to be conducted. A professional tax advisor can assist in assessing and minimising the risks involved in a dispute as well as managing the information flow to the ATO.
For further information please contact: Kevin Shields, Partner, Lavan Legal on (08) 9288 6909 or kevin.shields@lavanlegal.com.au
