Courts last resort for disputes: ATO
The Australian Taxation Office (ATO) attempts to resolve disputes quickly, and in a cost efficient and painless manner but is willing to resort to litigation if all other avenues were exhausted, the commissioner said.
In a speech to the National Small Business Summit, Commissioner Chris Jordan said he expected the ATO to communicate early with taxpayers instead of engaging in paper wars.
"You might be surprised to know that taxpayers and the ATO don't always agree," Jordan said.
"While the number of disputes with the ATO is relatively low, their significance is high and the effects of a dispute can be long-lasting."
He observed that more than 30 per cent of disputes related to smaller GST cases had been resolved with just one phone call.
The ATO received more than 35 million returns in 2014/15, comprising of 17 million income tax returns and 18 million activity statements. Around 700 cases were lodged with courts/tribunals, and around 150 cases went on to decision.
The ATO has also increased its use of alternative dispute resolution, using an independent in-house mediator to bring parties together. Jordan said this method is cheaper and more successful in solving disputes than legal battles.
However, Jordan said the ATO would not hesitate to litigate if all other paths were exhausted.
"We will litigate when the behaviour is such that we need to send a strong message to an individual — or broadly to the community that we won't sit idly by.
"We will [also] litigate when there is a contentious or certain point of law which requires clarification, and it is in the public interest to seek law clarification through litigation," Jordan said.
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