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Review to Dispute with the ATO

Published on 22 Aug 2013 | Took place at Four Seasons, Sydney, NSW

    Since the introduction of the Risk Differentiation Framework (RDF) the ATO has become much more sophisticated in its analysis of taxpayers. This is particularly the case in the SME segment, where the ATO has been very deliberate in publishing details of its risk review program and the areas of risk to be reviewed and audited. The transparency of the ATO's review program allows taxpayers to assess their own risk of review and whether they will be in position to persuade the ATO against audit and raising further taxation liability. However, this transparency cuts both ways as taxpayers who are selected for investigation by the ATO should be aware that initial contact from the ATO is not the beginning of the story. The ATO investigation has commenced as a result of careful consideration by the ATO and the taxpayer’s position is considered deficient in some respect.
    This seminar covered:
  • how to best manage ATO investigations to achieve optimal outcomes for taxpayers
  • compliance issues the ATO will focus in the SME segment
  • supporting a taxpayer’s position with documents and evidence (and how to avoid disclosing confidential information)
  • a taxpayer’s obligations during an ATO investigation
  • a taxpayer’s rights during an ATO investigation
  • strategies for managing a dispute with the ATO.

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Individual sessions

The risk differentiation framework - Practical applications to SMEs and tax agents

Author(s):  Michael CRANSTON

Ever wondered how the Tax Office assesses your clients in terms of risk to revenue? What sort of risk assessment is more likely to result in Tax Office review or audit activity? As a Tax Agent, how do you rate in comparison to your colleagues and what do these ratings mean? The Tax Office now utilises a point-in-time risk management tool called the Risk Differentiation Framework (“RDF”) to assess these risks.

This presentation willl:

  • provide an overview of the demographics of the RDF as applied to the SME Market – incorporating a description of the key variables that feed into the RDF algorithm
  • indicate likely Tax Office activity resulting from classification into one of the four risk categories
  • suggest activity (or lack of activity) that will keep clients in more benign risk categories
  • contain case studies based on Tax Office use of RDF
  • provide an overview of the RDF as applied to Tax Agents.
Materials from this session:

The practicalities of privilege: Keeping protected information protected

Author(s):  Thomas Arnold

Once an ATO review has commenced, the taxpayer will almost certainly need to support its position with relevant documents and information. However, there can be serious consequences for taxpayers (and their advisors) who provide protected information to the ATO.

This paper covers:

  • the state of the taxpayer's documentation and how readiness for an ATO review can be enhanced
  • categories of protected information: legal professional privilege and accountants' concession
  • common pitfalls and inadvertent waiver of a taxpayer's protected information
  • strategies for dealing with ATO requests involving confidential information
  • the Commissioner’s compulsive powers - sections 263 and 264 of the Income Tax Assessment Act 1936.
Materials from this session:

Managing a tax audit

Author(s):  Adrian ABBOTT,  Kevin J MUNRO

What happens from the moment the ATO makes contact with you or your client? How do you ensure your client’s rights are protected? What do you need to be on guard against from the beginning of a review to litigation? This paper is very practical and provided by two practitioners with years of experience in dealing with the Tax Office on various issues and on behalf of a range of different client types. In particular it covers:

  • determining whether an audit has actually commenced
  • what are your choices once an audit has commenced?
  • should you make a voluntary disclosure and the consequences of not doing so
  • how should you respond to ATO position papers
  • tips and best practice during the review and/or audit process
  • what to do if things are stalling or not going to plan
  • fact finding - what should your objectives be?
  • control - managing stakeholders and the ATO.
Materials from this session:

Managing tax disputes

Author(s):  Heydon MILLER,  Martin BOOTH

The formal dispute process begins after the ATO has assessed your client. This can be a long and expensive process depending on the issues involved. The purpose of this paper is to provide some insight to this process, the options available and how you may be able to bring the dispute to an earlier conclusion. This paper covers: 

  • how important is your objection
  • why objecting to private rulings can be disastrous
  • managing the objection process
  • pros and cons of 50/50 arrangements
  • “escalation” and/or Alternative Dispute Resolution (ADR): when, why and how
  • the role of freedom of information
  • the importance of evidence
  • choosing the battleground - AAT or Federal Court
  • ettlement deeds.
Materials from this session: