Engagement with the ATO & State Revenue Office (SRO)

A private ruling is a formal written statement from the ATO setting out how the tax law applies to your specific facts. It is binding on the ATO if you act in accordance with the facts you describe. Private rulings are most useful where the law is unclear, the transaction is novel, the amounts at stake are significant, or you need certainty before you act. The strength of the application turns on how clearly the facts and the proposed treatment are presented. We routinely prepare private ruling applications for taxpayers and tax agents.

Voluntary disclosures are most effective when made before the ATO becomes aware of the issue, before an audit or risk review starts, and before any formal recovery action. The earlier the disclosure, the larger the penalty remission usually available. The ATO publishes a graduated penalty scheme that gives meaningful reductions for voluntary disclosure made before audit and smaller reductions for disclosure made during audit. We tell clients honestly when a voluntary disclosure is the right move and when it isn’t.

A risk review is an information-gathering exercise. The ATO is deciding whether to escalate to an audit. An audit is a formal compliance review with statutory powers, including the power to require information and documents under penalty. The way you engage at risk-review stage often determines whether the matter escalates to audit at all.

An audit position paper is the ATO’s preliminary view of how the tax law applies to your facts, written before assessment. Your response is your opportunity to influence the ATO’s final position before an assessment is made. A strong response addresses the ATO’s analysis directly, presents the facts in the most favourable light supported by the law, and (where appropriate) corrects factual or legal errors in the position paper. A weak response is treated as confirmation of the ATO’s view.

In-House Facilitation is an ATO program where a trained ATO facilitator (different from the audit team) helps the parties resolve a dispute during or after an audit. It is most useful where there are factual disputes, multiple issues that can be narrowed, or a need to find a commercial pathway forward. It does not bind the ATO to a particular outcome, but the discussions held there often shape what the ATO does next.

Independent Review is an internal ATO process where a separate area of the ATO (not the audit team) reviews the audit team’s position before an assessment is made. It is available for large business, public groups, and increasingly for some private groups. An objection comes after an assessment and is a formal statutory process under Part IVC of the Taxation Administration Act 1953. Independent Review is typically faster, less formal, and lower cost than an objection. Where it is available, it is usually worth pursuing.

You can engage with the ATO yourself or through your accountant. Many engagement matters don’t need a lawyer at all. The matters that do need a lawyer are typically those where the dispute turns on a question of law, where the ATO has formed a position that requires legal argument to dislodge, where penalties or General Interest Charge exposure is significant, or where the matter is at risk of escalating to objection or ART. The diagnostic call sorts that out in 15 minutes.

Both, usually. Most of our engagement matters run as a coordinated team between Aptum, the client, and the client’s existing tax agent. Your accountant knows your numbers. We know how the ATO weighs them. We tell clients honestly when a matter is well-suited to their accountant alone, and when it has become legal in character and needs lawyer-led handling.

Sometimes. GIC remission applications turn on whether the circumstances of late payment were outside the taxpayer’s control, whether it would be fair and reasonable to remit, whether there are special circumstances, or whether it is otherwise appropriate to remit. Recent administrative practice has tightened. Michael Buscema’s published submission to the Inspector-General of Taxation sets out where the discretion is currently breaking down for taxpayers and how we frame applications.

It depends on the product. Private ruling applications typically take 28 to 56 days for the ATO to consider, though complex applications can take longer. Voluntary disclosures are usually processed within a few months. Audit response and In-House Facilitation timelines vary widely depending on the complexity of the matter. We give you a forecast timeline at the pathways assessment stage and update it as the matter progresses.