The only two certainties in life are death and taxes, or so the saying goes.
Some may believe that the Australian Taxation Office (ATO) lives by that as its mantra. However, sometimes they may make a decision that we as tax professionals and your trusted advisers may disagree with.
So what is the process if we believe the tax office is wrong?
First, a formal objection must be lodged regarding an assessment or a decision made by the tax office. The objection must be in writing and state why we (your tax adviser) think the ATO got it wrong. The onus is on us to prove that the ATO is mistaken in how they’ve decided.
There are different forms for lodging an objection, and it is recommended to leave these things to the professionals (us).
The ATO will often stand by their decision, but we (your tax adviser) may still not agree with it. So how do we proceed?
You can take many different paths to seek an external review of a decision made by the ATO. The most common is via the Administrative Appeals Tribunal (AAT).
The AAT conducts reviews of the decisions made by a number of Commonwealth Government departments, and while it is not a court as such, it is still able to provide you with an answer. A solicitor is not required to represent you when dealing with the AAT, but it is recommended due to the higher success rate of having representation when presenting your situation.
Further to the AAT, if you or the ATO still disagree about the situation’s answer, the matter can be progressed to the Federal Court. This is an expensive process that does require legal representation.
A matter that progresses to the Federal Court is usually reserved for disputes of many tens of thousands of dollars (at the very least). If you so desire, you can bypass the AAT and opt to take it straight to the Federal Court.
A single judge will hear your case initially in the Federal Court. If one of the parties still does not like the answer, they may allow you to appeal to the full Federal Court where there will be three judges to listen to your case.
If leave is granted, your matter may be heard by the highest court in the land, aptly named the ‘High Court’. In The Castle, this is the court where Darryl Kerrigan presented his case to save his home.
Very few taxation cases end up in the High Court, but those that do are often extreme.
