ATO’s tax controversy approach | KPMG | AU

ATO’s tax controversy approach – coming up trumps?

ATO’s tax controversy approach

Andy Bubb draws some analogies between the Australian Tax Office's approach to tax controversy and the US election.

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There was plenty of controversy during the 2016 US election campaign, including Donald Trump being the first major party presidential candidate since 1976 to refuse to publicly release a personal tax return.

Last month, the Autralian Taxation Office (ATO) released its 2016 Annual Report. We noticed some analogies between some of the tax controversy themes in the report and the US election, plus a few differences:

  • The documents are all-important – like the attention given to Trump’s tax returns and Clinton’s emails, the ATO is focused on documents, having issued 11,564 formal information requests to taxpayers this year. By comparison, it only accessed taxpayers’ premises 24 times.
  • Dealing with legacy issues – like Trump and Clinton, each addressed a range of historical issues during the campaign, the ATO has focused on concluding ‘aged cases’ in 2016, having settled 1,350 disputes (2015: 1,000).
  • Foreign relations – many current tax disputes are international, with 175 taxpayers now in ATO compliance activity regarding the multinational anti-avoidance law and with 409 exchange of information requests issued by the ATO during the year (2015: 281). As for the new president, cross-border engagement looks set to increase for the ATO.
  • The courts – the new president will appoint at least one new justice to the US Supreme Court, whereas the ATO is using the courts less and only litigated 480 cases this year (2015: 750).

For both, the ATO’s approach to tax disputes and the US presidency, only time will tell whether these issues remain the key themes in the year (or four) ahead.

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