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31 Oct 06 Review into ATO’s administration of GST audits announced

In a media release issued on 30 October 2006, the Inspector-General of Taxation, David Vos, announced that he is initiating a review into the administration by the ATO of audits in relation to GST. This topic was identified by key stakeholders during the IGOT's prioritisation project as one which should be short-listed for review. Accordingly, the review has been commenced by the IGOT on his own initiative in accordance with s 8(1) of the Inspector-General of Taxation Act 2003.

Stakeholders have raised concerns that during GST audits tax officers are pursuing trivial claims, are levying penalties and interest in an inappropriate manner, do not understand the industry they are auditing or the GST rules applicable to that industry, are employing unfair tactics during audits (such as the withholding of the full amount of a GST refund where only part of the relevant amount is the subject of investigation by the ATO) and are taking too long to complete GST audits.

Simultaneously with the issue of the media release, the IGOT released the review's Terms of Reference and Consultation Plan. The review will focus particularly upon the following matters:  

- the adequacy and effectiveness of ATO policies and procedures relating to the manner in which taxpayers and/or issues are identified for GST audit activity, including the extent to which the issues identified involve amounts which involve no net gain to the Revenue or which are of a timing nature only;
- the processes and procedures employed by the ATO to conduct audits; and
- the adequacy and effectiveness of the processes used by the ATO to evaluate the results of its GST audit program, including the processes used to compare amounts collected from GST audits with liabilities that are raised.  

This review will cover all taxpayers including government and not-for-profits.

The Consultation Plan outlines how the Inspector-General proposes to consult the community on this review. Submissions should be focussed on the terms of reference for the review and should be received by 15 December 2006.

For a copy of the IGOT's media release, 30 October 2006, go here

For a copy of the Terms of Reference and Consultation Plan, go here

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