Tax Reviews, Audits, Offences, Disputes, Litigation & Appeals

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Tax Reviews & Audits | Offences | Disputes | Litigation & Appeals



The Tax System

The Australian Taxation Office (ATO) review and audit taxpayers where there are concerns about returns which have been lodged, or because you have failed to lodge a return. The Australian tax system is complicated to navigate because of the existence of public and private rulings, practice statements issued by the ATO and a large amount of complex laws under the Income Tax Assessment Act 1936, Income Tax Assessment Act 1997 and for the GST under the A New Tax System (Goods and Services Tax) Act 1999.

Tax Reviews & Audits

If you have been advised by the ATO of a tax review or tax audit into your taxation affairs including GST or income tax, you should ensure that you provide information to the ATO about your tax issues so that they can correctly complete the tax review or audit. If you are not sure about what steps to take, or what options you have, please give us a call.

Following a review or audit, the ATO may issue an amended assessment and you may be liable for administrative penalties of between 25% and 95%. Interest also applies to outstanding tax debts, even if you disagree with the Commissioner's ruling on your tax affairs.

Tax Offences & Prosecutions

The ATO, Australian Federal Police and Commonwealth Director of Public Prosecutions investigate and prosecute tax offences including fraud, failures to lodge documents and false and misleading statements. Recent investigations include Project Wickenby, the Panama Papers and the Paradise Papers.

If you have been charged with an offence, you may wish to consider the Commonwealth DPP prosecution guidelines as there may be substantial reasons why you should not be prosecuted.

If you have been charged with an offence under the Tax Administration Act 1953 for failing to lodge a BAS or income tax return, or misleading the Commissioner, depending upon many factors, a Court may impose a large fine on you or impose a gaol sentence.

You should ensure that the Court is aware of your personal circumstances and other mitigating factors so that the Court can determine the correct penalty which should be applied in the circumstances of your case. If you need representation in Court, feel free to give us a call.

Tax Disputes

Taxpayers can utilise the internal review process within the ATO to seek to resolve disputes at an early stage. If you have a dispute with the ATO in relation to your taxation affairs, there are a number of key issues which you should consider in dealing with the dispute:

  1. If you are under audit for the GST, it will likely also result in an audit of your income tax;
  2. Do you have all the relevant records for the years in question? You will need to confirm if you have records of any signed agreements, tax invoices, bank statements and other tax related documents. You may be able to obtain copies of documents to assist you with the tax dispute.
  3. Can you pay the outstanding tax? Tax debts accrue interest and some tax disputes may take considerable time to resolve.
  4. Is there a risk of corporate insolvency or bankruptcy?
  5. If the dispute concerns unpaid company taxes, is there any outstanding PAYG or superannuation? Each director may be served with a Director Penalty Notice for the outstanding amounts.

What can I do if I am in a dispute with the Australian Taxation Office?

There are a number of steps you can take to deal with a tax dispute:

  1. Give voluntary disclosure of undeclared income or overclaimed deductions;
  2. Lodge an objection to a tax assessment;
  3. Contact the Dispute Assist Department at the ATO;
  4. Ask the ATO to utilise the In-house faciliation process to mediate a resolution;
  5. Ask the ATO to allow you to pay the tax debt over time (which can include an offer of security);
  6. Contact the Inspector-General of Taxation; and
  7. If you are operating a small business, contact the Australian Small Business and Family Enterprise Ombudsman.

If you are not sure about what steps to take, or what options you have, please give us a call.

High Net Worth Individuals

The ATO consider that wealthy individuals are tax residents who, together with their business associates, control net wealth of more than $5 million.

Click here for more information on specific issues for High Net Worth Individuals.

Tax Litigation & Appeals

If you have been unsuccessful in dealing with the ATO in a tax review or tax audit, after you have lodged an objection to an assessment you can consider appealing the ATO's decision by making an application to the Administrative Appeals Tribunal (AAT), or to the Federal Court.

Many taxpayers appeal to the AAT because they will not be liable for the legal costs of the ATO. The Tribunal member hearing the appeal "stands in the shoes" of the Commissioner of Taxation when considering the appeal.

Click here for more information on tax litigation issues.

Can I challenge an income tax or GST assessment?

Yes. You can object to an assessment issued by the ATO if you believe that the assessment is wrong. There are many technical grounds for an objection against an assessment which may be applicable to your circumstances.

A taxpayer must lodge an objection with the ATO objecting to the tax assessment setting out the relevant facts, the law and the taxpayer's contentions concerning how the law is to be interpreted and/or applied in the taxpayer's circumstances.

Is there a risk of a freezing order against my assets?

The ATO can apply for a freezing order against your assets and the assets of other people, especially where there is a danger that a prospective judgment will be wholly or partly unsatisfied because of the prospect of the removal of any assets from Australia or the dissipation of assets.

What should I do if I receive Court documents from the ATO?

If you are served with Court documents by the ATO, you have a limited amount of time to respond. Companies must be represented by a lawyer but individuals may represent themselves. If you are not sure about what steps to take, or what options you have, please give us a call.

Can I apply for a private ruling?

Yes. You may wish to apply for a private ruling if its not clear if the tax laws apply to you in a particular way in your circumstances. We can prepare a private ruling application to request the ATO to issue a private binding ruling to you.

Experienced and Cost Effective Tax Lawyers

Our team of specialist tax lawyers are highly experienced in managing tax disputes and litigation and can assist you to resolve your dispute with the ATO for a cost effective fee.

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