Australia Tax Litigation & Courts Guide
Australian tax litigation and court processes. The guide covers: the ATO objection process — the 'taxpayer' who 'disagrees with the ATO assessment' (the 'income tax assessment', the 'GST assessment', the 'FBT assessment', the 'penalty') can 'lodge the objection' with the 'ATO' under the 'Part IVC of the Taxation Administration Act 1953'; the 'objection' must be 'lodged within 60 days of the 'service of the notice of the assessment' (the '60-day objection period'); the 'objection' is the 'written statement' that 'sets out the grounds for the objection' (the 'taxpayer's arguments' and the 'evidence'); the 'ATO must 'decide the objection' within the 'reasonable time' (the 'ATO has the 'unlimited time' but the 'taxpayer can apply to the AAT or the Federal Court for the 'deemed refusal' if the 'ATO does not decide within 60 days'); the Administrative Appeals Tribunal (the 'AAT') — the 'taxpayer' can 'apply to the AAT' (the 'Administrative Appeals Tribunal') for the 'review of the ATO objection decision'; the 'AAT application' must be 'lodged within 60 days of the 'receipt of the ATO objection decision' (the '60-day AAT deadline'); the 'AAT' is the 'tribunal' that 'reviews the ATO decision' — the 'AAT can 'affirm', 'vary', or 'set aside' the 'ATO decision' and 'substitute the new decision'; the 'AAT proceedings' are 'less formal' than the 'court proceedings' — the 'taxpayer can 'self-represent' or 'use the tax agent'; the 'AAT' has the 'small tax claims jurisdiction' (the 'tax disputes under $5,000' — the 'simplified AAT process for the small claims'); the Federal Court of Australia — the 'taxpayer' can 'appeal the AAT decision' to the 'Federal Court of Australia' on the 'question of the law'; the 'taxpayer' can 'also choose to 'appeal directly to the Federal Court' from the 'ATO objection decision' (the 'direct appeal' — the 'appeal on the question of the law or the facts'); the 'Federal Court' is the 'superior court' that 'hears the tax appeals' and 'interprets the tax law'; the 'Federal Court' can 'affirm', 'reverse', or 'remit' the 'decision'; the High Court of Australia — the 'High Court' is the 'final court of appeal' for the 'tax disputes' — the 'appeal from the Federal Court to the High Court' is 'by the special leave' (the 'High Court grants the leave for the 'matters of the public importance''); the 'High Court decisions' are 'binding' on the 'lower courts' and the 'ATO'; the tax litigation costs — the 'costs of the tax litigation' (the 'legal fees', the 'tax agent fees', the 'expert witness fees', the 'court filing fees') are 'deductible' under the 'Section 8-1 of the ITAA 1997' (the 'expenses incurred in the managing the tax affairs'); the 'legal fees' for the 'tax objection and the AAT proceedings' are 'deductible'.
Objection Process
- 60-day deadline: The 'objection' must be 'lodged within 60 days' of the 'ATO assessment notice'.
- Written grounds: The 'objection' must 'state the grounds' — the 'taxpayer's arguments' and the 'evidence'.
- Deemed refusal: If the 'ATO does not decide within 60 days', the 'taxpayer can apply to the AAT'.
For the tax audit and the voluntary disclosure, see our Tax Audit & Appeals Guide →.
AAT & Federal Court
- AAT review: The 'taxpayer can apply to the AAT within 60 days' of the 'ATO objection decision'.
- Federal Court: The 'appeal from the AAT to the Federal Court' is on the 'question of the law'.
- High Court: The 'appeal to the High Court' is 'by the special leave only'.
For the legal fees and the tax-related deductions, see our Business Expenses Guide →.