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Lodging objections with ATO should be easier for tax lawyers, says Inspector-General
A new report from the Inspector-General of Taxation has recommended changes that would make it easier for taxpayers to lodge an objection with the ATO, including for lawyers representing clients in their objections.
Miranda Brownlee and Jerome Doraisamy
The newly appointed Inspector-General of Taxation and Taxation Ombudsman (IGTO), Ruth Owen, has released the report of her review into the Australian Taxation Office’s (ATO) administration and management of objections.
The report made recommendations in four key areas, which include increasing accessibility by extending online lodgement to all taxpayers and streamlining processes to reduce the time and resources devoted to high-volume, low-risk objections.
It also said that taxpayer engagement should be increased to speed up the time taken to complete an objection.
The report revealed that, on average, the ATO receives and resolves approximately 25,000 objections per year and has seen a significant increase in recent years.
In the 2024 financial year, the ATO resolved 30,429 objections – approximately 30 per cent more than the previous year.
The report noted that while taxpayers using a registered tax agent can lodge their objections online, taxpayers who are not represented by a tax agent need to manually lodge their objections by post or fax. This is also the case for taxpayers who are represented by other professionals, such as tax lawyers.
“We want to see the playing field levelled, so every taxpayer can lodge their objection online,” said Owen.
“Online lodgement is not only faster, it also provides instant acknowledgement and helps to ensure that all objections lodged are complete.”
The IGTO noted that objections to the Tax Office are generally how taxpayers challenge a decision of the ATO, but the process has become clogged.
Over half, or 55 per cent, of the objections received by the ATO are not challenging a decision.
Owen said these types of objections are most often lodged by taxpayers or representatives simply seeking to amend tax returns for prior years, where they have run out of time to lodge amendments.
According to the report findings, around 85 per cent of these cases are accepted in full or in part.
“There must be a simpler way for taxpayers to adjust their past tax returns that does not involve lodging an objection and waiting for months for it to be resolved. Usually, amendments to past years’ returns are processed in a matter of weeks. So why don’t we look at how such cases can be streamlined and dealt with far more quickly, particularly for low-risk cases,” said Owen.
“For taxpayers waiting for resolution, that would be a huge weight off their back.”
The IGTO report has made a raft of recommendations for the ATO specifically to help improve the administration and management of tax objections.
The IGTO wants to see the ATO prioritise a project to deliver an online objection lodgement channel, capture and report on key time frames and the range of tax professionals who are helping taxpayers with their objections.
The review has also called on the ATO to explore options to streamline objections that are low risk, where the taxpayer is simply seeking to amend a prior year return and to advise the Treasury and the government if no such feasible options exist.
It has also recommended that the ATO consider options to reconsider audit decisions where the taxpayer did not have an opportunity to engage with the ATO.
The IGTO has also called for the ATO to improve its feedback framework to share learnings from objections and consider monitoring the impact of the improvements.
The ATO has agreed in full, in part or in principle with all recommendations made by the IGTO.
