Compliance
Review
A review can mean a lighter-touch ATO check of a taxpayer's affairs, or a process by which an ATO decision is looked at again, internally or by an independent body.
The word review is used in two main ways in the tax system. First, the ATO can conduct a review of a taxpayer's returns or BAS. These checks are generally less intensive than a full audit. The ATO may ask a few questions, request particular documents or compare figures with data it holds. Many reviews are resolved quickly if the taxpayer provides clear, accurate information.
Second, review can describe the process for examining a decision made by the ATO. If you disagree with an assessment, a penalty or another decision, you can usually lodge an objection, which is considered by an ATO officer who was not involved in the original decision. This internal review is an important opportunity to have the decision looked at again, and it often resolves disputes without going further.
If an objection is not resolved in your favour, you generally have the right to seek review by an independent body. In Australia, this is typically the Administrative Review Tribunal, which replaced the Administrative Appeals Tribunal, or the Federal Court. There are time limits for taking these steps, and costs and procedures vary. People often get advice from a registered tax professional or lawyer before taking a matter to an external body.
A risk review of a business BAS may be triggered by things like unusual refunds or changes in reporting patterns. Typical questions are about how credits were calculated, whether invoices exist for large purchases, or whether sales were recorded correctly. Providing a reasonable explanation with records can avoid escalation to a full audit. Delays in answering may lead the ATO to look more closely.
The ATO also reviews its own practices through independent oversight. The Inspector-General of Taxation reviews systemic issues in tax administration, and there are complaint processes if a taxpayer thinks the ATO has treated them unfairly. These are different from disputing the amount of tax and may be suitable where the issue is service or process, not the technical result.
Time limits are critical. Objections must be lodged within the period set for that kind of decision, and extensions require a reason. Taxpayers should keep a record of dates, send documents in writing and retain proof of lodgment. If a deadline is missed, the ATO may allow a late objection, but this is not guaranteed.
This page is general information only. Confirm your situation with the ATO or a registered tax professional.
Worked example
A bakery receives an ATO letter querying a $3,300 GST credit claimed on a refrigeration unit purchased for $36,300 including GST. The bakery provides the tax invoice, bank record and delivery docket. After this lighter review, the ATO accepts the claim and no further action is taken. If the ATO had instead denied it, the bakery could lodge an objection.
Practical tips
- Answer review queries promptly with clear documents, because a quick explanation can prevent a full audit.
- Know the time limit for objecting to any decision you disagree with and note the date on the notice.
- Use the ATO complaints process for service problems, which is separate from disputing a tax amount.