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10 Aug 099 Review of the ATO's administration of public binding advice

In a media release issued on 7 August 2009, the Assistant Treasurer, Senator Nick Sherry, announced the release of the Inspector-General of Taxation's (IGOT) report on the Review of the Tax Office's administration of public binding advice.

The IGOT Review was initiated following changes to the law in 2006 aimed at making the ATO's advice legally binding for a wider range of topics and subsequent concerns that the full benefits of greater certainty may not have been realised.

The IGOT's report makes 4 key recommendations to give further and full effect to the widened public binding system. Two recommendations have been wholly accepted by the ATO, one  recommendation has been partially accepted by the ATO, and one recommendation has been wholly rejected by the ATO. Included in those recommendations accepted are the following:

  • further publicly available guidance should be provided to ATO staff on the full powers of the ATO to issue public binding advice on any matter involved in the application of the tax law, including on particular specified areas such as safe harbours;
  • systems should be established to allow more immediate communication from the ATO to the wider community of any changes to practice statements; and
  • the ATO seek independent legal advice on the meaning of "general administrative practice".

The recommendation rejected by the ATO is as follows:

"The Inspector- General recommends that the ATO take steps to ensure that any rulings in its TR, TD or MT series which are currently called 'rulings', but which are not in fact legally binding rulings, are separately identified or are re-named in a way which ensures that taxpayers are not misled as to the legal status of such 'rulings'."

The ATO also refused to publicly confirm that, subject to the independent legal advice on the meaning of "general administrative practice", all documents which the ATO refers to as "precedential ATO views" in PS LA 2003/3, together with all its publicly available practice statements, represent its "general administrative practice" for the purposes of the income tax laws.

For a copy of the Minister's media release, No 2009/024, 7 August 2009, go here

For a copy of the IGOT's report, Review of the ATO’s administration of public binding advice, 7 April 2009, go here


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