26/05/2010

Recently, we acted for several clients who had commenced a claim in the AAT seeking a review of a decision by the ATO on compliance of an SMSF and subsequent taxes imposed.

The AAT is a Commonwealth Tribunal which commenced in 1976 and its primary role is to provide a “merits” review of administrative decisions made by government entities, including the ATO.  A “merits” review is a review of the decision considering the facts, law and policy relevant to the decision.

The decision under review must be a “reviewable decision” by the government entity and the AAT literature states that the AAT is a mechanism of review that is fair, just, economical, informal and quick.  An example of a reviewable decision is under s.40 of the Superannuation Industry (Supervision) Act 1993 (“SIS Act”) where the ATO can issue a Notice of Non-compliance to a superannuation fund.  Section 10 of the SIS Act expressly states that the decision under s.40 of the SIS Act is a “reviewable decision”.

The general procedure of the AAT is more streamlined than a traditional court action.  Depending on the specific decision being reviewed, the applicant may have only 28 days to lodge an application with the AAT after the decision is made.  There are grounds for seeking an extension in certain circumstances.

For example, seeking a review of the ATO decision to issue a Notice of Non-compliance to a SMSF involves the following timeline for the AAT proceedings. 

Day 1 – the application is lodged with the AAT and the AAT provides a copy to the application to the ATO

4 weeks – the ATO is to provide the AAT and the applicant with a copy of all documents the ATO has in its possession that are relevant to the review.

6-10 weeks – the parties participate in a conference with the Conference Registrar of the AAT to discuss the issues in dispute and the need for any further evidence to be gathered.

10-12 weeks – 2 weeks before the second conference, the applicant files a Statement of Facts and Contentions, Expert Reports and witness statements (if required).  7 days before the second conference the respondent files a Statement in reply.

12-16 weeks – the parties participate in a second conference to discuss the merits of the case and any possible settlement. 

If the matter does not settle it will be allocated a hearing date.  In reviewing a decision, the AAT can confirm the original decision, vary or set aside the original decision.

For further enquiries, please contact David Nicoll of TOWNSENDS BUSINESS & CORPORATE LAWYERS on (02) 8296 6222.