The Inspector-General of Taxation (IGT), Mr Ali Noroozi, today announced terms of reference for his review into the Australian Taxation Office’s (ATO) use of Early and Alternative Dispute Resolution (EDR and ADR) and called for stakeholder submissions.

“My review will look at the ATO’s existing dispute resolution framework, including its skilling, cultural approaches and authorisation processes,” said Mr Noroozi.

The review will also consider which matters are well suited to employing EDR or ADR and which are not. Consideration will also be given to the most appropriate EDR and ADR techniques in particular circumstances and the manner in which and by whom they should be conducted.

“I recognise that ADR may not be the pill for every ill and may be delaying the inevitable in cases where, for example, there is a genuine dispute as to the application of the law,” said Mr Noroozi. “However, there may be circumstances, such as disputes on valuations, where ADR may prove to be the ultimate tool if used appropriately.”

The use of, and support for, ADR has gained significant momentum both domestically and internationally from governments, the courts, practitioners, regulatory bodies and other interest groups and citizens.

“ADR may give parties an opportunity to resolve matters effectively and efficiently while avoiding costly litigation,” said Mr Noroozi. “Resolving disputes earlier in time through EDR may also provide opportunities to reduce the severity, frequency and costs of disputes and potentially foster stronger on-going working relationships between the parties.”

The ATO supports the use of ADR and has issued policies and guidelines to its staff for resolving disputes by way of ADR. Following the IGT’s reviews into ATO settlements and objections, the ATO has also started work on delivering improved EDR techniques.

“Stakeholders have claimed that the ATO uses ADR sparingly and not early enough in disputes. It is further alleged that where the ATO has engaged in an ADR process, its officers have not been sufficiently skilled or authorised to resolve matters quickly with some claiming adverse impact in subsequent litigation. I intend to test these claims and whether there is potential to better facilitate a strong, collaborative tax dispute resolution culture,” said Mr Noroozi.

The IGT welcomes input into this review, particularly from those closely involved in tax dispute resolution. He has asked for recounts of both negative and positive experiences with the ATO.

Mr Ali Noroozi added, “My aim is for balanced thinking on the issues to lead to better outcomes for the tax administration system, including taxpayers.”

“I assure people that submissions and identities will be kept strictly confidential and not disclosed to anyone, including the ATO,” said Mr Noroozi. “In making your submissions please consider the terms of reference and submission guidelines.”

Terms of reference and submission guidelines for the review are available on the IGT website: www.igt.gov.au. Submissions are due by 26 August 2011.

SYDNEY

26 July 2011
Media contact: Ali Noroozi – (02) 8239 2107