Tax Return Amendments
If you’ve made a mistake in your tax return, or if the Tax Office has made a mistake, or if you disagree with a tax office decision or assessment, then there are procedures for making amendments to tax returns.
The Tax Office can independently initiate amendments to an assessment based on information received or discovered, such as through their various data-matching programs.
Small businesses automatic penalty relief – once in 3 years
Available for small businesses and some other entities – a penalty will not be applied to tax returns and activity statements for an inadvertent error. The relief cannot be applied for; it will be automatically granted by the Tax Office no more than once every 3 years.
Initiating a dispute
To take up a dispute, there are a number of ways to proceed:
- Simple matters, such as a clerical error or oversight, can be dealt with by way of a written request for amendment except for SMSF super funds, for which any amendment requires the annual return to be re-submitted in full – see here
- In simple matters the ATO may provide a contact telephone number in the amended assessment, which can be used to question the matter without having to identify the matter with legal precision.
- For individuals and small businesses The Tax Office now provides an In-house facilitation service which is an can be used expedite the management of tax or super disputes without the need for formal processes objection. The process is free, not compulsory, and does not affect taxpayer’s rights of review, for which the time limits should still be kept in mind. Further details of this service can be reviewed here.
- More complicated matters involving tax assessments, administrative penalties, Private Rulings and reviewable GST decisions are usually dealt with by way of objection.
- Electronic options for requesting an amendment are progressively being made available on-line – unassisted individuals via the myGov account portal, other entities via the business or tax agents’ portals.
For a summary of amendment request methods with links to forms for all entities go here.
Except for matters of fraud or tax evasion, there are time limits within which amendments can be made, or an objection considered (see more on this below).
The financial penalties which apply to tax misstatements, omissions or errors are designed to reward early and voluntary disclosure, with a combination of administrative penalties and interest applying to underpaid tax.
The Tax Office can also launch a prosecution for offences for which there are court-imposed fines, and in some matters, imprisonment. In practice, prosecution action is reserved for the more serious or willful cases.
Within limitations, amended assessments and penalties can also be the subject of a request for review or objection.
Managing taxation disputes is not an easy D.I.Y. area, because the tax law is very complex, and often what seems simple, isn’t. The requirements for legal validity at various stages of a review process can be exacting, and failure to observe the details can result in lost opportunities to save tax or penalties.
If a significant amount of money is at stake, professional guidance is a wise investment. It is important that your accountant has experience in tax disputes and the negotiation of claims and settlements with the ATO, not just tax return preparation.
- Taxation Ruling TR 2011/5 – Income tax: objections against income tax assessments
- Getting tax return copies and other information
- Tax Office – new limited ‘remedial power‘
- For checking progress of an amendment or a tax return – see ATO contacts here
Other Avenues of Review
- Complaints – Information about lodging a complaint is provided here.
- Appeals from decisions on objection will go to the tribunals and/or through the court system depending on the matter and nature of dispute.
- The Tax Ombudsman deals with complaints concerning Public Interest Disclosures issues relating to the ATO or the Tax Practitioner’s Board. The tax complaint handling role was transferred to the Inspector-General of Taxation from 1 May 2015.
This page was last modified 2018-07-04