Objections, reviews and appeals
How long do I have to lodge an objection?
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People and organisations have set timeframes for lodging an objection to a notice of assessment after receiving the notice:
individuals generally have two years to lodge an objection with the ATO;
small businesses (i.e. with a turnover of less than $10 million) have two years to lodge an objection with the ATO;
medium businesses (i.e. with a turnover between $10–$50 million) have two years to lodge an objection with the ATO; and
individuals who carry on a business that is not a small business, are a partner in a partnership, or are a beneficiary of a trust that is not a small business have four years in which to lodge an objection with the ATO, depending on the circumstances.
These periods may be extended.
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In some situations, you will receive an amended assessment from the ATO. In these circumstances, the following timeframes apply to objecting to the amended assessment after receiving the assessment:
individuals: two years;
small businesses: two years;
medium businesses: two years; and
other taxpayers: four years.
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There are fees and charges payable to courts and tribunals when you apply to have a decision of the ATO reviewed.
When applying to the ART, if the amount of tax being disputed is less than $5000 – or if the tax officer has refused to extend the time for you to lodge a taxation objection, or refused your request to be released from paying a debt regardless of the amount involved – a lower application fee of $111 is payable where an application is lodged on or after 1 July 2024.
A fee of $602 is usually payable where the applicant is a small business entity, as such claims are decided within the Small Business Taxation Division of the ART. For most other applications, the standard application fee is $1121 (as of 1 July 2024).
Details of the other fees and charges can be found on the website of the particular court or tribunal (ART: www.art.gov.au; Federal Court: www.fedcourt.gov.au).
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A Notice of Objection form is on the ATO website. Your objection must adequately raise the disputed issues and the grounds you are relying on for claiming that the assessment is incorrect. That is, you must prove that the tax assessment is incorrect or excessive. Statements such as ‘it is incorrect’ or ‘it is excessive’ will not be sufficient without evidence to support them. In other words, you will not be successful merely because the ATO cannot justify its assessment of your tax liability.
Should your objection ultimately come before the ART or a court, you may be limited to arguing the grounds of objection that were sent to the ATO. Therefore, it is important that these grounds are clearly and comprehensively discussed. For this reason, it is often desirable to have your objection prepared by a professional tax adviser.
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Once the objection is sent to the ATO, it will be considered by an officer who did not make the original decision.
Where the ATO has not made a decision within 60 days of the objection being lodged, you may write to the ATO requiring a decision to be made. Generally, if no decision is made within a further 60 days, the objection is deemed to be disallowed. This will enable you to pursue other remedies without further delay.
Where the ATO rejects an objection, you generally have 60 days in which to either apply to the ART for a review or appeal to the Federal Court.
The Federal Circuit and Family Court of Australia also has jurisdiction to review some administrative decisions, such as those of the ATO. An objection will generally be heard by the Taxation and Commercial Division of the ART.
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If your argument with the ATO is one of fact, it is probably preferable to have the matter heard by the ART. Proceedings are relatively informal, and the ART is not bound by the strict rules of evidence that apply in courts. Further, if you are unsuccessful, you will generally not have to pay legal costs except for your own.
The ART has wider power than a court to review the exercise of the ATO’s discretions. Hearings are conducted in private, your identity will not be published and, if you wish, you may be represented by lawyers or others.
Where the matter involves a question of law, or is regarded as a test case, it may be preferable to have the matter heard by the Federal Court, despite the formality and cost. In test cases, the ATO may undertake to pay your costs, even if the ATO succeeds in the Federal Court.
It is possible for you or the ATO to lodge further appeals with the Full Court of the Federal Court, though such appeals will be restricted to questions of law. The final stage in the appeal process involves an appeal to the High Court, which may only occur if that court gives special leave to appeal.
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If you are dissatisfied with administrative action taken by the ATO, you can complain, without charge, to the Inspector-General of Taxation (IGT). The IGT heads a team of experts who investigate and resolve taxpayers’ disputes with the ATO. Complaints do not need to be about technical legal matters; they can relate to the fairness and efficiency of ATO procedures and policies. Note that the IGT may be reluctant to become involved in matters that are more appropriately dealt with under the objections and appeals processes.
The IGT can recommend that the ATO reconsider decisions, explain decisions further, pay compensation, or change its procedures. While these recommendations are not binding on the ATO, the IGT is able to publicise such findings and report them to the Tax Commissioner, the treasurer, the prime minister or to parliament. Complaints may be made in writing, by phone, in person or by using the online complaints form.
For the IGT’s contact details, see ‘Contacts’ at the end of this chapter.
Objections, reviews and appeals
Chapter: 5.5: Taxation
Contributor: Daniel Smedley, Principal and Accredited Tax Law Specialist, Sladen Legal
Current as of: 1 September 2024
Law Handbook Page: 352
Next Section: Paying your tax
