Reinventing the management of tax disputes – get on board!

Reinventing the management of tax disputes

On 10 February 2015, we discussed the Australian Taxation Office's (ATO) current focus on resolving tax disputes earlier in the tax dispute lifecycle. This point was emphasised by First Assistant Commissioner, Review and Dispute Resolution, Debbie Hastings, on 20 February 2015, in her address, “Reinventing the way we manage tax disputes”.

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Narrow gauge seam train

This reinvention is being successfully facilitated by a number of ATO initiatives, including independent reviews of large business audits, and by involving the ATO's Law Design & Practice group personnel much earlier in the tax dispute lifecycle. The latter is giving ATO compliance teams the capability to identify key risk areas more quickly, and to articulate these more succinctly – including telling taxpayers what evidence is required to mitigate the identified risks.

For taxpayers, the ATO’s reinvention means that proactive preparation is fundamental if they want to positively impact and influence the outcome of the dispute. This means that taxpayers should be answering ‘yes’ to the following questions:

  • Have we pro-actively and thoroughly documented our transactions, projects and uncertain tax positions – e.g. for high value/complex transactions, merger and acquisition (M&A) activity, funding structures and/or significant cross-border activity?
  • Do we have a clear picture of possible resolution scenarios for disputed tax positions, including objectively assessing how best we can impact and influence revenue authorities?
  • Have we considered proactively engaging with revenue authorities to discuss an upcoming transaction, M&A activity or current year tax position, and considered what the consequences of this might be?

The ATO’s reinvention train seems to have the Duke and Duchess of Cambridge on board, be gathering steam and leaving the station – are you ready to jump on board too?

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