ATO expands audit position review to include income tax

076 ATO expanding audit position review pilotThe ATO has expanded and extended their independent review service to encompass income tax, GST, excise, luxury car tax, wine equalisation tax, and fuel tax credits.

ATO expands audit position review to include income tax. The service was originally scheduled to run for 12 months from 1 July 2018 but has now been extended until 31 December 2020. In addition, the service now appears not to be limited to any one state or territory (it was previously only available to small business disputes in Victoria and South Australia). The use of the service does not preclude you from seeking other dispute options.

Small businesses rejoice! The independent review service to dispute income tax audits has been extended and expanded by the ATO. The initial pilot originally commenced on 1 July 2018 and was scheduled to run for 12 months. It involved an independent review conducted by an officer from the ATO’s review and dispute resolution business line. This officer would not have been involved in the audit and was said to bring a fresh perspective to the review.

The service was conceived as an avenue for small businesses to obtain early and fair resolution of their issues. It is available in addition to other dispute options including lodging an objection or the use of in-house facilitation service to assist with the dispute. You can also raise your matter with the Inspector-General of Taxation and Tax Ombudsman or the Australian Small Business and Family Enterprise Ombudsman.

Only small business disputes involving income tax audits in Victoria and South Australia was included in the initial pilot. The new expanded and extended independent review service will now cover the areas of income tax, GST, excise, luxury car tax, wine equalisation tax, and fuel tax credits. It does not appear to be limited to any one state or territory and will run until 31 December 2020.

It is important to note that the areas of superannuation, FBT, fraud and evasion finding, and interest are not covered under the expanded independent review service, therefore other avenues of dispute resolution would need to be pursued in relation to those areas.

The actual review process consists of an independent reviewer considering documents setting out your position and the ATO’s position, an informal meeting will then be scheduled with both parties as an opportunity to help the independent reviewer to understand the facts and contentions. Generally, the independent review will not consider new facts, evidence or arguments that are material and had not been raised during the audit.

Where new facts, evidence or arguments are introduced, the independent review may be placed on hold so the audit team can consider the material in the first instances. In some cases, the independent review will be finalised and the audit team will consider any new material and re-issue a final audit letter. Small businesses that are unhappy with the outcome of the re-issued final audit letter may have the opportunity to apply for another independent review if the ATO considers it appropriate.

For small businesses considering using this service, it is important to note some eligibility requirements. According to the ATO, your business will not be eligible for an independent review in instances where:

  • when requested you do not complete a consent to extend the amendment period to allow the review to take place;
  • the relevant notice of assessment or amended assessment has already issued;
  • you were disengaged throughout the audit process; and
  • ATO has serious concerns that you do not intend to comply with the payment of any potential assessments following the outcome of the independent review.

Your ATO audit case officer will contact you if you’re eligible for an independent review and a written offer of independent review will also be included int the audit finalisation letter. If you wish to proceed with the review, you will need to contact the ATO within 14 days of the date of the audit finalisation letter. This period may be extended at the ATO’s discretion provided certain circumstances exist.

Want an independent review?

If you would like to pursue and independent review, we can help you clearly outline the specific issues disputed as required by the ATO. Hunter Partners can also help if you’ve already applied for an independent review and require some help in explaining your situation in the informal meeting. Contact Hunter Partners today for these services and many more.

Hunter Partners are Accountants, Tax Agents and Financial Planners. We can assist you with all aspect of your accounting, tax and financial planning requirements, call Hunter Partners on (07) 4723-1223.