New AAT Small Business Tax Disputes Division

April 2019

The ATO has confirmed how it will engage with the new Small Business Taxation Division of the Administrative Appeals Tribunal.

Many small business owners have faced the challenges of dealing with AAT when a tax dispute arises, particularly when faced with the realities of resources available to the ATO vs what might be available to a small business taxpayer in supporting ongoing dispute resolution. Without doubt, it can have a significant impact on small business.

The creation of the Small Business Tax Disputes Division is intended to go some way toward addressing the inequity of resources. The ATO has released its own guidance that as an over-arching principle, it will not retain external legal representation for cases that are looked at by the new division. Additionally, the ATO has confirmed that when they do engage external representation, it will provide funding for equivalent representation for the taxpayer.

Unfortunately, the ATO has significant legal resources at its disposal so there are concerns about the measure having limited effectiveness.

Another interesting statement in the ATO's policy indicates that "The ATO will not enforce recovery of the tax debt in dispute before the Small Business Taxation Division other than in exceptional circumstances" although how this broad statement will be applied in practice remains to be seen.

Any tax dispute with the ATO can have significant ramifications for small business owners, particularly when it triggers an audit.

If you find yourself the target of a dispute with the ATO, speaking to your accounting team as a first step is vital as they are able to engage on your behalf. Contact us in 02 9957 4033 for advice or a discussion with our team.

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This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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