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20 Jun 11 Decision Impact Statement – FCT v AAT

On 17 June 2011 the ATO released a Decision Impact Statement on the decision of the Full Court of the Federal Court in FCT v AAT [2011] FCAFC 37; 2011 ATC 20-248.

This decision concerned review rights where the Commissioner refuses to make a determination in relation to contributions under s 292-465 ITAA 1997 (prior to amendments made by the Superannuation Legislation Amendment Act 2010). By majority, the Full Court held that the AAT was correct to conclude that the assessments in this case could not be reviewed under Part IVC of the Taxation Administration 1953 on the basis of the Commissioner’s refusal to make a determination under s 292-465 ITAA 1997.

The effect of the Court’s ruling is that taxpayers will not be able to use the process in Part IVC of the TAA 1953 to seek review of certain assessments made under Division 292 of the ITAA 1997.

The Commissioner will decline to formally consider a taxation objection to the extent that it purports to be made under Part IVC of the TAA 1953 but is based upon a s 292-465 decision which the taxpayer applied for before 17 November 2010.

The Commissioner also expects that the AAT would dismiss, for want of jurisdiction, any application for review of a purported objection decision or ECT assessment to the extent that it purports to be made under Part IVC of the TAA 1953 but is based upon a s 292-465 decision which the taxpayer applied for before 17 November 2010. If any such applications are received, the Commissioner will draw this decision to the attention of the AAT and seek dismissal of the application.

The Commissioner will not formally consider a subsequent application to disregard or reallocate contributions which are already covered by a valid s 292-465 decision. Once such a decision has been made, the Commissioner’s statutory power to make or refuse to make a determination is considered to have been exhausted.

Taxpayers can still talk to the ATO about the decision in order to ensure that there has not been any misunderstanding. If a taxpayer asks, in most cases the ATO will review the decision, consistent with good administrative practice.

Depending on the circumstances, a taxpayer who is dissatisfied with an affected decision may be able to seek review of that decision outside of Part IVC of the TAA 1953; for example under the Administrative Decisions (Judicial Review) Act 1977 (Cth).