ADR and the ATO: How the 0.0007% is achieved

ADR and the ATO: How the 0.0007% is achieved

Annemarie Wilmore, Senior Associate and Emily Pratt, Senior Lawyer with KPMG Law, show how alternative dispute resolution can help taxpayers avoid going to court.

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The Commissioner’s address to the Tax Institute 31st National Convention noted that of all returns lodged last year there were only 26,000 disputes between taxpayers and the ATO (0.0007 percent of total lodgements). Of those 0.0007 percent disputes only 150 proceeded through to judgment by a Court.

This indicates two things:

  • The ATO’s focus on early engagement with taxpayers has resulted in a reduction in the number of disputes and in cases proceeding to judicial decision; and
  • Alternative dispute resolution (ADR) is playing an increasing role in the ATO’s approach to managing disputes between taxpayers and the Commissioner.

The Commissioner also noted that the use of ADR has improved the perception of fairness from 44 percent to 60 percent in the last quarter. The ATO has continued to increase its focus and investment in ADR, training its staff so that they can operate as mediators, assisting in the resolution of disputes. In addition, the ATO has encouraged the participation of legal representatives from the professional services firms to attend this training so the representatives can gain an understanding of the ATOs processes and better appreciate and utilise ADR processes going forward. Members of the KPMG Law team have been invited to attend mediation training courses, hosted by the ATO, earlier in the year. The ATO’s commitment to ADR underpins the statistics set out in the Commissioner’s address.

ADR can be an efficient, cost effective manner for resolving tax disputes. Successful ADR outcomes will depend on a number of variables including an assessment of litigation risk, evidence and the technical merits of the case. KPMG Law routinely engages in ADR discussions with revenue authorities on behalf of clients. Please contact either Annemarie Wilmore or Emily Pratt if you would like to discuss the ADR mechanisms available to resolve a dispute with the ATO in further detail.

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KPMG’s Tax Dispute Resolution & Controversy Services work with clients to protect against, prepare for, and resolve disputes with tax authorities.

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