Your Taxpayer Rights In A Nutshell
Andrew Jeffers | May 01, 2018
Have you ever received a notice from the Tax Department?
As a taxpayer, this situation can be pretty scary, especially when the ATO surprises you with a desk audit or a full-blown audit.
Do you know your taxpayer rights?
Preliminary remarks on your taxpayer rights
The taxation world operates based on the Income Tax Assessment Acts (ITAA).
There are a few ITAAs that changed over the years, but the penalties and the system involved are covered by a particular part of the law, called the Administrative Law.
When you get fines and penalties from the Tax Department, you have the right to appeal. Your appeal will go directly to the Administrative Appeals Tribunal.
What can the Tax Department do?
they have the legal authority to come to your business premises
they can ask to see your documentation
they can search through your computer
You might also be interested in: I’ve Missed The Tax Deadline, What Do I Do?
What if you get a letter from the ATO?
As soon as you receive a letter from the ATO, talk to your accountant!
Before starting to worry and wonder, “What am I going to do? I am up for an audit and they are going to make an assessment,” get in touch with your accountant and address this issue as soon as possible. They will have the right answers for you and help you understand all your rights and obligations under the Administrative Law.
Note: I’m not here to give you legal advice, it’s not my expertise. For any legal advice about your taxes and taxpayer right it’s always best to contact a qualified lawyer.
Types of reviews:
1. Judicial review
The judicial review assesses the legality of the decision you received. Specifically, it analyses the following aspects:
Did they have a prejudice against you or your business?
Were they biased in any way?
Was this some sort of collusion?
Did they follow the appropriate legislation in their decision-making process?
The judicial review gets done through the Federal Court. But the first point of contact is the High Court.
2. Merits review
A merits review is an administrative reconsideration of a case and it analyses whether or not there are merits for you to reassess your case.
When you get an assessment from the Tax Department you have somewhere between 21 and 28 days to lodge an appeal with the Administrative Appeals Tribunal (AAT).
Make sure you get a lawyer and you have your accountant on site.
When you appeal to the Administrative Appeals Tribunal, you go through a process reassessing your case based on merit, your situation, the current facts and circumstances.
Here’s an example:
If you had a family crisis like, a family member’s illness, which prevented you from fulfilling your legal obligations, you can ask the AAT to reassess your case based on your particular situation.
The AAT is an excellent form of arbitration between yourself and the Tax Department to try and plead your case if you’ve been given an adverse finding. This is the place where you can pledge your case, don’t be afraid to do it.
Remember: If you haven’t lodged your tax return in time, due to a personal situation, the Tax Department has within their scope to assess you based on what they believe to be the case and you’ll have to prove them otherwise.
Tip: The Administrative Appeals Tribunal (AAT) can mediate between yourself and the ATO to try and plead your case if you’ve been given an adverse finding.
You might also be interested in: When Are You An Australian Resident for Tax Purposes?
Last but not least
Don’t bury your head in the sand! Deal with your legal issues up front. Waiting is not going to help your case.
Get in touch with your accountant and your lawyer, they are the experts able to offer you the best advice and help you understand your rights and obligations as a taxpayer.
If there are still some gaps regarding your taxpayer rights, don’t hesitate to contact me! I’d be happy to give you a hand. Let’s get in touch today!