ATO consistency – 3 identical cases, 3 different decisions

The Australian Taxation Office (ATO) has been accused of inconsistency in the way in which it makes discretionary decisions around the remission of the General Interest Charge, including taking multiple positions on identical issues.

Major accounting group, CPA Australia has told a Senate Committee that it has concerns about the ATO’s administration of the General Interest Charge (GIC) and Shortfall Interest Charge (SIC) pointing to “widely varying outcomes”.

“Our members have reported inconsistent and widely varying outcomes when applying to the Commissioner of Taxation for the remission of GIC or SIC,” CPA Australia told the committee. “These inconsistencies suggest that remission decisions are often subjective, appearing to depend more on the case officer managing the request rather than the merits of the case, even when the facts are identical.”

“This variability persists despite the ATO’s introduction of an interest charge remission form on Online Services for Business and Agents,” it said.

“Another inconsistency reported by members relates to the differing instructions provided to taxpayers when remission requests are denied. In several cases, the ATO’s communication outlined different methods for submitting additional information for review.

“For example, in three separate GIC remission requests involving the same taxpayer – a director for all three companies – each with identical circumstances, the ATO issued two decline letters with inconsistent instructions:

• “Alternatively, if you believe there are further circumstances that we should have considered when making our decision, you may reapply”, or
• “Alternatively, if you believe there are further circumstances that should have been considered when making our decision, you can phone us on 13 11 42.”, or
• ATO asked the taxpayer to submit their request with more information.

“These discrepancies raise concerns about the consistency and fairness of the ATO’s remission process. If the circumstances and taxpayer are the same, it is unclear how three different outcomes and varying instructions for further review were reached.”

“We submit that the ATO undertake a review of its GIC and SIC remission process to ensure greater consistency, transparency, and fairness in decision-making.”