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ADR in Tax Disputes

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Debbie HastingsFirst Assistant CommissionerReview and Dispute Resolution

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ADR as part of dispute management

ATO objective •To resolve disputes as early as possible while treating taxpayers fairly and consistently

Corporate Plan 2014-18• Reduce time to resolve disputes• Reduce the number of disputes• Lower costs for taxpayers and the ATO• Make it easier to interact with the ATO

Litigation remains an important part of our dispute management strategy

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Review and Dispute Resolution

• Independent Review of large market audits• Objections for companies and privately held

groups with an annual turnover of $100m+• Part IVC and debt litigation• Champion role for ADR across the ATO

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Alternative Dispute Resolution

• ADR is a process, other than judicial or tribunal determination, in which an impartial person assists the parties in dispute to resolve or narrow the issues between them.

• Most common form of ADR in tax disputes: Advisory – neutral evaluation, case appraisal

Facilitative - facilitation, mediation

• ATO Plain English Guide to ADR

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When is ADR appropriate or suitable?

• Dependent on the nature and circumstances of the dispute

• At different points through out the dispute• Increasingly being used at audit and objection• ADR is still available after an appeal has been

lodged in the Federal Court or AAT.

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The use of ADR in tax disputes

• Large market taxpayer disputes Advisory ADR Blended approaches There is no “one size fits all” Resolve or narrow issues in dispute for litigation

• Small business and individual disputes Facilitative ADR In-house facilitation now available

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What you can expect from the ATO in an ADR process

• PSLA 2013/3 The ATO will

• be prepared,• participate fully and in good faith• ensure all relevant documents are provided to the

taxpayer prior to the ADR• listen and remain courteous• ensure the decision maker is present

• The ATO expects taxpayers and their representatives to approach the ADR in the same way.

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Our ongoing commitment to ADR and dispute resolution

• Report by the Australian Centre for Justice Innovation covering feedback of all ADR during 2013-14

participants generally positive about the process and outcomes.

• Factors that make ADR more effective and successful Preparation is very important Both parties need to approach ADR with a

positive attitude Decision maker should be present

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Our ongoing commitment to ADR and dispute resolution

• Continue to seek feedback from key stakeholders

Dispute Resolution Working Group• Membership includes professional associations, Law

Council of Australia, AAT, Federal Court, AGD and ADR academics

Legal Practitioner Roundtable• All state and Territory Law Societies and Bar

Associations, Law Council of Australia, Law Institute of Victoria and panel firms.

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• Any questions?

© Debbie Hastings, First Assistant Commissioner ATO