Small businesses now have another pathway to resolve tax disputes with the ATO making its independent review service a permanent option for eligible small businesses (ie those with a turnover of less than $10m). The service was initially conceived as an avenue for small businesses to obtain early and fair resolution in relation to audit positions.
The original pilot commenced in 2018 and centered around income tax audits in Victoria and South Australia which was later expanded in 2020 to include all other States and Territories along with other areas of tax including GST, excise, luxury car tax, wine equalisation tax, and fuel tax credits. After what the ATO considered to be a successful multi-year pilot, the service has now become a permanent feature.
An independent review can be requested by an eligible small business if they disagree with some or all of an audit position and an offer for an independent review has been made by the ATO. However, the review will not be the first opportunity small businesses have in responding to audit findings. Initial findings will be disclosed in an interim positions paper and small businesses are able to raise areas of disagreement before the final audit letter is sent out.
If your small business is eligible for a review, your ATO audit case officer will contact you and a written offer of independent review will also be included int the audit finalisation letter. If you wish to proceed with the review, you will need to contact the ATO through the relevant email address within 14 days of the date of the audit finalisation letter. The ATO notes that the email must clearly specify and outline each area of disagreement with the audit position.
As a part of the review process, you will also be asked to complete and return a consent form to extend the amendment period which will allow the ATO to complete the review before the period of review for the relevant assessment ends. According to the ATO, the review cannot be commenced unless the consent form is provided.
Where your small business obtains approval to use the independent review service, an independent reviewer will be allocated to your case and contact you to discuss the process. Although this process involves an in-house ATO officer, this officer will be from a different part of the ATO and will not have been involved in the original audit. It is important to note that the areas of superannuation, FBT, fraud and evasion finding, and interest are not covered under the independent review service.
Therefore, if your dispute relates to those areas or if you do not want to pursue the independent review process, other options including lodging an objection or the use of in-house facilitation service may be utilised. You can also raise your matter with the Inspector-General of Taxation and Tax Ombudsman or the Australian Small Business and Family Enterprise Ombudsman.