If you’ve received a tax assessment from the Australian Taxation Office (ATO) that you believe is incorrect, don’t worry – you have the right to dispute it by lodging an objection. Here’s everything you need to know about preparing a tax objection.

Grounds for Objection

You can dispute a default assessment or an audit decision if you have grounds for an objection.

In relation to a tax audit you will have received a “Reasons for Decision” from the ATO.  Read this very carefully.  You can then decide whether you have grounds to dispute the amended tax assessment.

Grounds for an objection to your tax assessment usually fall into distinct categories: facts and whether tax law has been applied correctly.  In many instances the grounds may be a combination of both facts and tax law.

Facts

The starting place is to consider whether the facts are wrong. If the facts are wrong, then you have good grounds for objecting.

The facts include your personal details and/or the value of a particular transaction which gave rise to the disputed tax.  You should keep in mind that you will have to prove that the facts are wrong and be able to provide the necessary evidence to show this. It is therefore critical that you include supporting evidence when submitting an objection.  It is also helpful if you are able to include evidence from independent sources such as bank statements etc.

This makes your objection stronger and gives it credibility.

Application of Tax Law

If you’re unsure whether the ATO has applied tax law correctly, consider seeking assistance from a tax practitioner. They can analyze the situation and advise you on the validity of your objection.

Penalties:

If you are disputing penalties, you should explain why you consider the penalties are not justified or should be reduced.

The ATO considers:

• your compliance history
• whether tax was deferred or avoided
• the reasons for the increased tax (or reduced credits) that brought about the imposition of penalties
• whether the ATO became aware of the tax shortfall as a result of your voluntary disclosure or because of ATO compliance efforts such as an audit
• your attitude towards complying with the tax laws

If you believe that you were misled by your accountant then there are also ‘safe harbour’ provisions that may apply to reduce the penalty.

Throughout this process, presenting evidence that supports your viewpoint is essential.

Time Limits

Generally, you have between 60 days and 4 years to lodge a tax objection. Extensions may be granted in exceptional circumstances, but it’s best to act promptly.

In exceptional circumstances it is possible to apply for an extension beyond the standard time periods.

Decision on Objection:

Once the objection has been lodged, patience is key. The Commissioner has the responsibility to decide, however this process takes time. In cases where a decision is not reached within 60 days, a notice can be sent to expedite the process.  It is not advisable to send a notice to the Commissioner to make a decision as this may automatically result in the Commissioner make a negative or adverse decision

If the Commissioner fails to decide, the objection is not accepted, and the original decision or assessment stands without any changes based on the objection. However, if the Commissioner has made a decision, you will be sent a notice of amended assessment.

Appeals and Next Steps:

If the ATO rejects your objection, you can appeal the decision at the Administrative Appeals Tribunal (AAT) or the Federal Court. Keep in mind that this can be a costly process, so consider your options carefully.

How We Can Assist:

At Waterhouse Lawyers, we understand the complexities of challenging ATO decisions. Our experienced tax lawyers are here to help, ensuring that your objections are thoroughly prepared. With our guidance, you can navigate the objection process effectively, protecting your interests and minimising unnecessary hardships.

Reach out via email admin@waterhouselawyers.com.au, or phone (02) 9252 8746.