IGOT's follow up review into delayed or changed ATO views on significant issues released
17 Nov 2014
In a media release issued on 14 November 2014, the Acting Assistant Treasurer, Senator Mathias Cormann, announced the release of the Inspector-General of Taxation report entitled "Follow Up Review into Delayed or Changed Australian Taxation Office Views on Significant Issues" (the 'U-turns' review).
Senator Cormann said:
"[The 'U-turns' review] looks at the ATO’s implementation of recommendations made in the original report of March 2010.
The original report looked into claims of ATO ‘U-turns’ and made recommendations to reduce the adverse impacts on taxpayers.
The term ‘U-turns’ is commonly used to refer to situations where the ATO retrospectively applies its changed views on significant interpretative matters or administrative practices.
The Inspector-General found that the ATO has fully implemented three of the four administrative recommendations, while the fourth (Recommendation 4) has been partially implemented.
Two additional recommendations were made to ensure that the ATO properly implements a holistic approach to managing ‘U-turns’. The ATO has agreed to implement these additional recommendations."
The two additional recommendations are as follows:
The IGT recommends that the ATO update PSLA 2011/27 and relevant staff instructions and guidance materials, such as PSLA 2007/5 and the Code of Settlement, to ensure that 'U-turn' issues are considered by staff throughout the compliance process and as a relevant factor in settlement negotiations.
The IGT recommends that the ATO:
(a) enhance the effectiveness of its officers' research pursuant to PSLA 2011/27 by, for example, providing compliance officers with access to the research of the ATO's risk assessment section at the commencement of compliance activities;
(b) instruct ATO officers to document research undertaken pursuant to PSLA 2011/27;
(c) where there is a dispute in relation to a 'U-turn':
i. to the extent permissible by law, provide details of the research undertaken pursuant to PSLA 2011/27 to the taxpayer or their adviser and engage in further discussion with a view to resolving the dispute;
ii. if the dispute persists after the sharing of research and further engagement envisaged at (c)(i), refer the matter for review to an independent senior officer from the Law Design and Practice Group;
iii. notify the Second Commissioner if the dispute persists after the independent senior officer review mentioned at (c)(ii);
(d) publish information regarding the ATO's administration of PSLA 2011/27, including:
i. the number of cases in which taxpayers have alleged an ATO 'U-turn';
ii. the number of cases in which PSLA 2011/27 was applied and ATO acceptance of a 'U-turn'; and
iii. descriptions of accepted 'U-turns'."