18 Mar 10 Review into the Implications of any Delayed or Changed ATO Advice on Significant Issues
In media release No 2010/048, issued on 17 March 2010, the Assistant Treasurer, Senator Nick Sherry, announced the release of the Inspector-General of Taxation's (IGOT) review into the Implications of any Delayed or Changed ATO Advice on Significant Issues was released.
Overall, the IGOT found that, "in certain circumstances, taxpayers’ perception of changes in ATO views or practices are justified. The main problem is not one binding ATO advice clearly changing another, but it is disagreement over whether a previous view or practice existed and if it did exist whether the subsequent view constituted a change. The situation is further compounded by ATO delays in firstly identifying its compliance concerns (which are usually the reasons for developing the subsequent view) and, secondly, finalising its position in relation to those concerns".
Specifically, the IGOT found scope for further improvement in the following areas:
- improving certainty of legislative protection for taxpayers where the ATO retrospectively applies a newly developed ATO view (this issue is discussed in Chapter 4 of the review);
- refining the ATO’s process and criteria for deciding whether to apply new, changed or clarified ATO views retrospectively, to better ensure that an appropriate balance is struck between:
– protection for taxpayers where the ATO has facilitated or contributed to the formation of taxpayer views which are inconsistent with subsequent ATO views; and
– preventing a laissez-faire situation where any position could be arguably justified on a particular area of uncertainty before the ATO releases its formal view (this issue is discussed in Chapter 5); and
- improving the ATO’s engagement with the community while it develops its technical views (this issue is discussed in Chapter 6); and
- minimising the time periods occurring before the ATO identifies its compliance concerns and the time taken in finalising ATO views without compromising its reliability (this issue is discussed in Chapter 5).
In relation to legislative protection, the Assistant Treasurer said that the Government would consider this issue in the context of the overall response to the independent (Henry) tax review.
The Assistant Treasurer said that the ATO "broadly agrees" with each of the other issues.
"The [ATO] has informed me that it will be developing, in close collaboration with the taxpayer community, its administrative practice concerning the circumstances in which it seeks to apply its views retrospectively by incorporating specified process steps and criteria set out in the [IGOT] report," the Assistant Treasurer said.