Tax Practitioners Board - Annual Report 2013-14

The Tax Practitioners Board Annual Report 2013-14 has now been published. The report describes how the Board carried out its registrations function and provided guidance to registered tax practitioners on their obligations. The report also outlines the work the Board has undertaken to prepare and consult with the financial services profession for the implementation of the new tax (financial) adviser regulatory arrangements, which commenced on 1 July 2014.

Inspector-General of Taxation reviews

On 14 November 2014, the Acting Assistant Treasurer announced the release of the following two reports by the Inspector-General of Taxation (IGT):

The ‘U-turns’ review looks at the ATO’s implementation of recommendations made in the original March 2010 report. The original report looked into ATO claims, retrospectively applying its changed views on significant interpretative matters or administrative practices. The IGT found that the ATO has fully implemented three of the four administrative recommendations, while the fourth has been partially implemented.

The IGT made further recommendations relating to ‘U-turns’ to ensure the ATO properly implements a holistic approach to managing ‘U- turns’. These recommendations, which have been accepted by the ATO, are:

  • that the ATO update Practice Statement Law Administration PSLA 2011/27 (PSLA 2011/27) and relevant staff instructions and guidance materials, such as Practice Statement Law Administration PSLA 2007/5 and the Code of Settlement, to ensure that 'U-turn' issues are considered by staff throughout the compliance process and as a relevant factor in settlement negotiations, and
  • that the ATO:
  1. enhance the effectiveness of its officers' research pursuant to PSLA 2011/27 by, for example, providing compliance officers with access to the research of the ATO's risk assessment section at the commencement of compliance activities
  2. instruct ATO officers to document research undertaken pursuant to PSLA 2011/27
  3. where there is a dispute in relation to a 'U-turn':
    1. to the extent permissible by law, provide details of the research undertaken pursuant to PSLA 2011/27 to the taxpayer or their adviser and engage in further discussion with a view to resolving the dispute
    2. if the dispute persists after the sharing of research and further engagement envisaged at (c)(i), refer the matter for review to an independent senior officer from the Law Design and Practice Group
    3. notify the Second Commissioner if the dispute persists after the independent senior officer review mentioned at (c)(ii);
  4. publish information regarding the ATO's administration of PSLA 2011/27, including:
    1. the number of cases in which taxpayers have alleged an ATO 'U- turn'
    2. the number of cases in which PSLA 2011/27 was applied and ATO acceptance of a 'U-turn', and
    3. descriptions of accepted 'U-turns'.