Alternative Dispute Resolution in Tax Disputes

Tax Bar Association Seminar - In dispute with the ATO: What to expect

Deborah Hastings 2 October 2014

Text version of PowerPoint presentation

ADR as part of dispute management

ATO objective

  • To resolve disputes as early as possible while treating taxpayers fairly and consistently

Corporate Plan 2014-18

  • Reduce time to resolve disputes
  • Reduce the number of disputes
  • Lower costs for taxpayers and the ATO
  • Make it easier to interact with the ATO

Litigation remains an important part of our dispute management strategy

Review and Dispute Resolution

  • Independent Review of large market audits
  • Objections for companies and privately held groups with an annual turnover of $100m+
  • Part IVC and debt litigation
  • Champion role for ADR across the ATO

Alternative Dispute Resolution

  • ADR is a process, other than judicial or tribunal determination, in which an impartial person assists the parties in dispute to resolve or narrow the issues between them.
  • Most common form of ADR in tax disputes:
    • Advisory – neutral evaluation, case appraisal
    • Facilitative - facilitation, mediation
  • ATO Plain English Guide to ADR

When is ADR appropriate or suitable?

  • Dependent on the nature and circumstances of the dispute
  • At different points through out the dispute
  • Increasingly being used at audit and objection
  • ADR is still available after an appeal has been lodged in the Federal Court or AAT.

The use of ADR in tax disputes

  • Large market taxpayer disputes
    • Advisory ADR
    • Blended approaches
    • There is no "one size fits all"
    • Resolve or narrow issues in dispute for litigation
  • Small business and individual disputes
    • Facilitative ADR
    • In-house facilitation now available

What you can expect from the ATO in an ADR process

  • PSLA 2013/3
    • The ATO will
      • be prepared,
      • participate fully and in good faith
      • ensure all relevant documents are provided to the taxpayer prior to the ADR
      • listen and remain courteous
      • ensure the decision maker is present
  • The ATO expects taxpayers and their representatives to approach the ADR in the same way.

Our ongoing commitment to ADR and dispute resolution

  • Report by the Australian Centre for Justice Innovation
    • covering feedback of all ADR during 2013-14
    • participants generally positive about the process and outcomes.
  • Factors that make ADR more effective and successful
    • Preparation is very important
    • Both parties need to approach ADR with a positive attitude
    • Decision maker should be present

Our ongoing commitment to ADR and dispute resolution

  • Continue to seek feedback from key stakeholders
    • Dispute Resolution Working Group
      • Membership includes professional associations, Law Council of Australia, AAT, Federal Court, AGD and ADR academics
    • Legal Practitioner Roundtable
      • All state and Territory Law Societies and Bar Associations, Law Council of Australia, Law Institute of Victoria and panel firms.

Any questions?

© Debbie Hastings, First Assistant Commissioner ATO