Skip to content

Review into the ATO’s administration of penalties

A report to the Assistant Treasurer

February 2014

Table of Contents


Telephone: (02) 8239 2111
Facsimile: (02) 8239 2100

Australian Government - Inspector-General of Taxation crest

Level 19, 50 Bridge Street
Sydney NSW 2000
GPO Box 551
Sydney NSW 2001

21 February 2014

Senator the Hon Arthur Sinodinos AO
Assistant Treasurer
Parliament House
Canberra ACT 2600

Dear Minister

Review into the Australian Taxation Office’s (ATO) administration of penalties

I am pleased to present you with my report of the review into the ATO’s administration of penalties.

I have made a recommendation for the Government to consider specific opportunities to improve the current tax penalty regime and encourage greater voluntary compliance. These opportunities include further stratification of the existing penalty regime and the compensation for time-value of money on unsustained penalties.

It should be noted that recommendations relating to penalties have also been made to the Government in earlier Inspector-General of Taxation (IGT) reviews, particularly the Review into improving the self assessment system. The Government may wish to consider all these recommendations as part of a broader review of the penalty regime.

I have also made nine recommendations to the ATO. These are aimed at improving its penalty decisions, guidance material and identification, collection and analysis of penalty information as well as taxpayer perceptions that penalties may be used as leverage to influence primary tax disputes. The ATO has agreed, in full, in part or in principle, with all of these recommendations. Where the ATO has disagreed, they have sought to address the underlying issues to the extent that they believe their resources allow.

I am grateful for the support, contribution and willingness of many who provided their time, expertise and experience in the conduct of this review.

Yours faithfully

SIGNED

Ali Noroozi
Inspector-General of Taxation


© Commonwealth of Australia 2014

ISBN 978–0–642–74958–1

Ownership of intellectual property rights in this publication

Unless otherwise noted, copyright (and any other intellectual property rights, if any) in this publication is owned by the Commonwealth of Australia (referred to below as the Commonwealth).

Creative Commons licence

With the exception of the Coat of Arms (see below), the IGT logo and ATO sourced material, this publication is licensed under a Creative Commons Attribution 3.0 Australia Licence.

Image of the Creative Commons symbol.

Creative Commons Attribution 3.0 Australia Licence is a standard form licence agreement that allows you to copy, distribute, transmit and adapt this publication provided that you attribute the work. A summary of the licence terms is available from the Creative Commons website. The full licence terms are available from the Creative Commons website.

The Commonwealth’s preference is that you attribute this publication (and any material sourced from it) using the following wording:

Source: Licensed from the Australian Government Inspector-General of Taxation under a Creative Commons Attribution 3.0 Australia Licence.

The Australian Government Inspector-General of Taxation does not necessarily endorse third party content of this publication.

Use of the Coat of Arms

The terms under which the Coat of Arms can be used are set out on the It’s an Honour website.