ATO Part IVC Objections: Review Rights for Tax Decisions

Statutory basis for Part IVC objections

Part IVC of the Taxation Administration Act 1953 (Cth) establishes the framework for reviewing taxation decisions. This pathway is generally applicable to assessments and other ‘reviewable decisions’.

Section 14ZL of the Act specifically allows taxpayers to object to a taxation decision, following the procedures outlined within Part IVC. To formally lodge an objection, section 14ZU mandates the use of an approved form, a detailed explanation of the grounds for the objection, and adherence to the prescribed time limits.

The statutory time period for lodging an objection varies. Most individual taxpayers have two years from the date of the assessment to lodge an objection, although some taxpayers are granted a four-year period. Taxpayers subject to a Reportable Tax Position regime or those with complex affairs also have a four-year timeframe for lodging an objection.

The objection decision

The Commissioner is required to make a decision on a taxpayer’s objection within a reasonable timeframe. Section 14ZYA provides a mechanism for taxpayers to request the Commissioner make an objection decision within 60 days of the taxpayer providing notice.

The Commissioner’s decision must be provided in writing and include reasons for the decision. This decision can wholly allow the objection, partly allow the objection, or disallow the objection entirely.

If the objection is disallowed, either wholly or in part, the taxpayer has recourse to external review or appeal under section 14ZZ. However, section 14ZZK restricts the issues that can be raised in any external review to the grounds originally stated in the objection, unless leave to raise additional issues is granted.

ART review and Federal Court appeal

Following an objection decision, taxpayers have two avenues for further review. They may apply to the Administrative Review Tribunal (ART) for a merits review, or appeal directly to the Federal Court of Australia.

The Administrative Review Tribunal (ART) replaced the Administrative Appeals Tribunal (AAT) from 14 October 2024, as a result of the Administrative Review Tribunal Act 2024. If seeking a merits review, applications to ART must be lodged within 60 days of the objection decision, as outlined in section 14ZZC.

Appeals to the Federal Court also have a 60-day timeframe for lodgement, as detailed in section 14ZZN. Importantly, Federal Court appeals are generally restricted to questions of law, unless the Court grants permission to present new evidence.

Burden of proof and tax payment

The taxpayer has the responsibility to demonstrate that the assessment is excessive or the decision is incorrect. This is achieved by presenting sufficient evidence to satisfy the Commissioner on the balance of probabilities, as outlined in section 14ZZK.

Lodging an objection does not automatically suspend the obligation to pay the assessed tax. Under the Taxation Administration Act 1953, the tax remains due on the original due date unless a deferral has been approved by the Commissioner. The general interest charge (GIC), potentially at a rate of 50%, may continue to accrue on unpaid amounts, although the Commissioner retains the discretion to remit this charge.

Case management practices, guided by section 14ZZB and relevant practice directions, may require the taxpayer to pay all or part of the disputed tax while the objection is being resolved. Negotiated arrangements, such as a part payment arrangement or a 50/50 deferral arrangement, are frequently established with the ATO during the objection or review process.