The Law Handbook 2024

404 Section 5: Managing your money though such appeals will be restricted to questions of law. The final stage in the appeal process involves an appeal to the High Court, which may only occur if that court gives special leave to appeal. Take it to the Inspector- General of Taxation If you are dissatisfied with administrative action taken by the ATO, you can complain, without charge, to the Inspector-General of Taxation ( IGT ). The Inspector-General heads a team of experts who investigate and resolve taxpayers’ disputes with the ATO. Complaints do not need to be about technical legal matters; they can relate to the fairness and efficiency of ATO procedures and policies. Note that the IGT may be reluctant to become involved in matters that are more appropriately dealt with under the objections and appeals processes. The IGT can recommend that the ATO reconsider decisions, explain decisions further, pay compensation, or change its procedures. While these recommendations are not binding on the ATO, the IGT is able to publicise such findings and report them to the Tax Commissioner, the treasurer, the prime minister or to parliament. Complaints may be made in writing, by phone, in person or by using the online complaints form. For the IGT’s contact details, see ‘Contacts’ at the end of this chapter. Paying your tax When and how to pay Generally, if you owe more tax than has been withheld from your income during a financial year, you must pay that tax by 1 December of the following financial year. You can pay your tax by cheque, money order, direct debit, BPAY or at a post office. While an appeal is pending The fact that an appeal is pending will not excuse you from meeting your taxation liability by the date specified on the notice of assessment. However, where you are disputing an assessment, the ATO will often agree not to take recovery action while the objection is being decided. In particular, a new measure arising from the 2021–2022 federal budget and introduced by legislation effective from 12 December 2022 grants the AAT the power to pause or modify ATO debt recovery action in relation to disputed debts that are being reviewed by the Small Business Taxation Division of the AAT. If your objection is disallowed and you exercise your appeal rights, provided there is a genuine dispute, the ATO may continue to defer recovery action provided you pay 50 per cent of the amount in dispute. This amount is refundable, with interest, if you succeed. If you are not successful, the GIC applies to late payments (see ‘Penalties, interest charges and offences relating to tax returns’, above). If you receive a tax refund due to a successful objection, review or appeal, you will be entitled to interest on the amount of the refund for the period in which the tax was overpaid. Any interest received in this way will form a part of your assessable income, though the refunded tax does not. Extension of time and repayment by instalments The ATOmay grant an extension of time (essentially, postponing actions to recover tax payable). This extension would not normally exceed 12 months and will not go beyond 15 June in the tax year the assessment is issued. The ATO needs to be satisfied that valid reasons exist to justify the extension and you will also have to pay GIC. Hence, when you request an extension of time, or permission to pay by instalments, you should prepare a statement that outlines: • your tax file number, the assessment number, the tax year, the amount of tax involved, and the due date for payment; • a brief statement of reasons for the application, including your financial position; and • an offer to pay by a specific date or by instalments beginning and ending on a specific date. Ideally, you should make an application at least 10 days before the due date for payment but the ATO may extend this time. If you are seeking an extension for more than six months, you should supply the ATO with a statement of your assets and liabilities and other information. Because different parts of the