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Appendix 3: Public advice and dispute management

The ATO tailors its approach to providing public advice and guidance, with web-based guidance, fact sheets, rulings and more detailed explanations users can access depending on their needs. A significant focus throughout 2020–21 was helping the community understand and access a range of economic stimulus measures, including the extension of the JobKeeper payment and the new JobMaker initiatives.

During 2020–21, we continued to receive positive feedback on our responsiveness to the delivery of public advice and guidance on COVID-19 issues and the government’s economic response.

Since late 2020, focus and resources have shifted from COVID-19 related priorities to progressing and delivering other priority public advice and guidance. We continue to:

  • seek feedback throughout the development of public advice and guidance products, including through targeted consultation groups, to ensure our advice and guidance meets community needs
  • seek to understand the impact of our advice and guidance products and consider if there are better ways to achieve the objectives for issuing that advice.

The following tables provide information on how the ATO assists people to understand their tax and superannuation obligations, and how we work with people who disagree with our assessments.

Public advice

The ATO provides advice in public rulings and a range of other product types as shown in the next table. Timeliness of our public advice (for public rulings) and information relating to the effectiveness of our public advice issued through business, partner and government interactions are shown in the subsequent tables.

The volume of formal advice and guidance products delivered in 2020–21 is broadly consistent with previous years. The slight decline in number and timeliness of delivery of our public ruling products in part reflects our shifting priorities during COVID-19, and the large volume of timely and targeted practical advice published on ato.gov.au to support government economic initiatives and tax time.

Key public advice and guidance products, 2018–19 to 2020–21

Product

2018–19

2019–20

2020–21

Total public rulings (including significant addenda)(a)

54

51

44

Practical compliance guidelines (including significant updates)(b)

20

22

16

Taxpayer alerts

4

3

4

Decision impact statements

7

11

12

Synthesised texts of the Multilateral Instrument and Australian tax treaties

6

9

4

TOTAL

91

96

80

Notes

(a) Includes both draft and final rulings, excludes class and product rulings.

(b) Includes both draft and final guidelines.

Timeliness(a) of draft public rulings finalised, 2020–21

Product

Number

0–6 months

7–12 months

Over 12 months

Taxation rulings and determinations(b)

14

3

2

9

Law companion rulings

3

1

1

1

Annual rulings

4

All published within tax time requirements

n/a

n/a

Notes

(a) Timeliness refers to the time taken to finalise following the end of the public consultation period.

(b) Excludes class and product rulings.

Business, partner and government interactions, 2018–19 to 2020–21

Activity

2018–19

2019–20

2020–21

Effectiveness of public advice issued. In particular in 2020–21, responses showed:

  • steady results generally – indicating that our public advice and guidance is continuing to meet the needs of our clients
  • overall, qualitative feedback on our responses to helping the community understand and access a range of economic stimulus measures has been positive.

Responses for
2018–19 indicate overall a similar level of satisfaction to that reported for 2017–‍18, with a marked improvement in the ability of our clients to find the guidance they needed.

Much of our public advice and guidance focus for 2019–20 has been on providing advice on natural disasters and COVID‑19. Overall, qualitative feedback on our responses to those crises has been positive.

We have issued a steady flow of public advice related to COVID-19 and public advice that was paused during 2019–‍20 due to COVID‑19 priorities. Overall, external consultation feedback supports that our public advice and guidance meets clients’ needs.

Dispute management

We resolved over 29,800 objections. There were 668 applications for Part IVC review or appeal to the Administrative Appeals Tribunal (AAT) or other courts in 2020–21, with 593 decisions made either in relation to these applications or applications made in earlier years.

The next table presents information on the numbers and types of our dispute cases.

Disputes, 2018–19 to 2020–21

Cases

2018–19

2019–20

2020–21

Returns lodged

37,628,879

38,853,917

39,440,211

Adjustments arising from audits

530,508(a)

467,884

441,317

Disputed cases resolved

  • objections

26,276

22,290

29,877(b)

  • settlements

635

417

475

  • litigation outcomes(c)

314

375

593

  • independent reviews

13

22

14

  • small business independent reviews(d)

66

87

52

Part IVC cases lodged to courts/tribunals

441

455

668(c)

Part IVC cases resolved prior to court hearing

212

222

426(c)

Part IVC cases proceeded to decision

102

153

167(c)

New Part IVC matters in proportion to objections(e)

14.1 per thousand

16.9 per thousand

20.7 per thousand

Number of test case litigations finalised

7

10

12

Notes

(a) Increased use of advanced analytics and automation led to increased review and audit activities for individuals not in business.

(b) Of the total objections, 12,204 were completed as part of the implementation of stimulus measures due to COVID-‍19. This also impacted the number of cases lodged to courts/tribunals (243).

(c) Part IVC litigation methodology includes Administrative Law matters, and from 2020–21 the methodology was updated to include debt release matters.

(d) The small business independent review service, which was in pilot phase from 1 July 2018, moved to business as usual effective 1 April 2021.

(e) Previously reported as Objections to new Part IVC litigation matters. Excludes Administrative Law matters and from 2020–21 the methodology was updated to include debt release matters.

Settlement cases reviewed under our Independent Assurance of Settlements Program for 2020–21 are shown in the next table. Independent assurers review settlements only after they have been finalised. As a result, settlements finalised in the second half of any financial year will likely be reviewed by an independent assurer in the following financial year.

Settlements reviewed by our Independent Assurance of Settlements program during 2020–21(a)

Financial year of
settlement assurance

Settlement cases

ATO position $m

Settled position $m

Variance $

Variance %

2019–20

11

2,216.8

1,373.3

843.5

38

2020–21

7

628.2

341.1

287.1

45.7

TOTAL

18

2,845

1,714.4

1,130.6

39.7

Note

(a) Totals may differ from the sum of components due to rounding.

The next two tables provide more detail on settlements that occurred during 2020–21.

Stage at which settlement occurred, 2020–21(a)

Stage

Settlement cases

% of total settlements

ATO position $m

Settled position $m

Variance $m

Variance %

Pre-audit

140

29

625.1

369.2

255.9

41

Audit

229

48

695.6

432.3

263.4

38

Objection

70

15

459.5

260.8

198.8

43

AAT

18

4

39.9

9.1

30.8

77

Federal Court

18

4

680.5

558

122.5

18

High Court

0

0

0

0

0

0

TOTAL

475

100

2,500.7

1,629.3

871.4

35

Note

(a) Totals may differ from the sum of components due to rounding.

Settlements by client group, 2020–21(a)

Client group

Settlement cases

% of total settlements

ATO position $m

Settled position $m

Variance $m

Variance %

Individuals(b)

22

5

2.2

0.7

1.5

67

Small business

78

16

27.8

15

12.8

46

Privately owned and wealthy groups

206

43

901.3

522.2

379.1

42

Public and multinational businesses

73

15

1,564.6

1,089.2

475.4

30

Not-for-profit organisations(c)

0

0

0

0

0

0

Self-managed superannuation funds

96

20

4.8

2.3

2.6

53

APRA-regulated superannuation funds

0

0

0

0

0

0

TOTAL

475

100

2,500.7

1,629.3

871.4

35

Notes

(a) Totals may differ from the sum of components due to rounding.

(b) The client group Individuals does not include those who are in business – for example, sole traders.

(c) The client group Not-for-profit organisations includes government entities.

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