Mistakes mean material consequences for small business taxpayers

In response to the Four Corners program aired on the ABC last Monday night, The Tax Institute’s Senior Tax Counsel, Professor Bob Deutsch CTA says, “Mistakes made involving the ATO can have serious impacts on taxpayers. The examples shown in the Four Corners program last night undoubtedly demonstrate that when material mistakes occur, they have material consequences.

“The playing field is not level when you take into account the powers and resources the ATO has at its disposal. The ATO does offer some processes, such as facilitation, to try to resolve disputes it may have with small business taxpayers.

“However, these taxpayers may struggle to correct ATO mistakes using the available processes in a cost-effective and timely manner. For these taxpayers, there seems to be nowhere for them to go. This can cause very serious impacts for taxpayers, as was demonstrated in the Four Corners program”, said Professor Deutsch.

“Consideration should be given to the possibility of having ATO decisions being referred to an independent body or a separate unit within the ATO for further examination in cases where there are allegations of ATO mistakes and there is financial urgency due to actions taken by the ATO. Though costly to implement and maintain, this may present a more accessible option for smaller taxpayers to challenge aspects of ATO behaviour involving allegations of mistakes.

“We would encourage people to utilise the services of a tax professional who could assist them in the event their dealings with the ATO become adversarial.”

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