Small businesses rejoice! The independent review service to dispute income tax audits has been extended and expanded by the ATO. The initial pilot originally commenced on 1 July 2018 and was scheduled to run for 12 months. The service was conceived as an avenue for small businesses to obtain early and fair resolution of their issues. It is available in addition to other dispute options including lodging an objection or the use of in-house facilitation service to assist with the dispute. You can also raise your matter with the Inspector-General of Taxation and Tax Ombudsman or the Australian Small Business and Family Enterprise Ombudsman.  

Only small business disputes involving income tax audits in Victoria and South Australia was included in the initial pilot. The new expanded and extended independent review service will now cover the areas of income tax, GST, excise, luxury car tax, wine equalisation tax, and fuel tax credits. It does not appear to be limited to any one state or territory and will run until 31 December 2020. It is important to note that the areas of superannuation, FBT, fraud and evasion finding, and interest are not covered under the expanded independent review service, therefore other avenues of dispute resolution would need to be pursued in relation to those areas.

The actual review process consists of an independent reviewer considering documents setting out your position and the ATO’s position, an informal meeting will then be scheduled with both parties as an opportunity to help the independent reviewer to understand the facts and contentions. Generally, the independent review will not consider new facts, evidence or arguments that are material and had not been raised during the audit.

Where new facts, evidence or arguments are introduced, the independent review may be placed on hold so the audit team can consider the material in the first instances. In some cases, the independent review will be finalised and the audit team will consider any new material and re-issue a final audit letter. Small businesses that are unhappy with the outcome of the re-issued final audit letter may have the opportunity to apply for another independent review if the ATO considers it appropriate.

For small businesses considering using this service, it is important to note some eligibility requirements. According to the ATO, your business will not be eligible for an independent review in instances where: you do not consent to extend the amendment period, the assessment has already been issued, you were disengaged throughout the audit process, and where ATO has serious concerns about your compliance with payment of potential assessments.

Your ATO audit case officer will contact you if you’re eligible for an independent review and a written offer of independent review will also be included int the audit finalisation letter. If you wish to proceed with the review, you will need to contact the ATO within 14 days of the date of the audit finalisation letter. This period may be extended at the ATO’s discretion provided certain circumstances exist.