1. Tax cases are different because: 1.of a complex statutory overlay biased in favour of revenue authorities 2.It has all been done before (and if a taxpayer won statute amended- see 1.) 3. the motivating factors of the revenue are not commercial in nature 4.the revenue is bound to its own rules

2. THERE ARE TWO TYPES OF TAX CASES 1.objection & review/appeal (Pt IVC Tax Administration Act or State equivalent) - Lisa will discuss 2.Everything else - Michael will discuss

3. “EVERYTHING ELSE” 1.Cases about process 2.Cases about money 3.Cases about criminal jeopardy

4. Cases about process Commissioner “bound” to follow own processes – Model litigant rules – Administrative obligations – Legal obligations

5. Administrative law – Commissioner’s general administration v. specific powers – ADJR – Section 39B, Judiciary Act – State equivalents

6. Investigations and audits – Compulsory examinations & access to documents Legal professional privilege Accountants “privileges” Self incrimination privilege – Position papers and draft position papers Provision to respond

7. Validity of assessments/notices Privative clauses Prima face evidence certificates Averment

8. Why challenge processes? Strategic advantages? Time limits Criminal jeopardy

9. Cases about money - objection & review/appeal – see Lisa - management of recovery may be critical to ability to seek review/appeal

10. Taxes imposed - final taxes v PAYG obligations v withholding assessment notice v Running Balance Account withholding taxes stricter compliance -general rule tax to be paid pending objection & review/appeal

11. ATO Policies former ATO receivables policy – now PSLA series PS LA 2011/14PS LA 2011/14: General debt collection powers and principles - provides guidance on the circumstances where the Commissioner will exercise his power to permit the payment of tax-related liabilities by instalment or defer the time for payment.

12. Relevant factors consideration of past, current and future transactions, taxable income, exempt income, wealth through inheritances, gifts and windfalls, exclusion of book entries (depreciation, investment allowances, journal entries), the nature of business deductions and the curtailing of excessive personal expenditure, and income alienation access to liquid assets or assets easily convertible to cash (shares, debentures, bonds, personal assets such as jewellery, art) ability to convert fixed assets to cash (sale of home, land, motor vehicle, boats, plant and equipment), and ability to obtain loans/funds - from financial institutions, from family/friends or related entities.

13. Recovering disputed debts PS LA 2011/4PS LA 2011/4: provides guidance on the circumstances and risk factors that determine how and when the ATO will take action to recover disputed debts. – 50/50 arrangements interest waiver must object/appeal – other options (instalments etc.) – hardship

14. Withholding liabilities are treated differently employee’s PAYG/superannuation withholding treated as a statutory trust PS LA 2011/18: Enforcement measures used for the collection and recovery of tax-related liabilities and other amounts - provides guidance on the policies and process followed by the ATO in the use of enforcement procedures relating to the collection of outstanding debts.PS LA 2011/18

15. Recovery mechanisms Garnishee notices Freezing orders Departure Prohibition Orders Director Penalty Notices Bankruptcy/insolvency

16. Garnishee notices Provided for by div. 260 of sch. 1 to TAA – 30% salary & wages – GIC accrues – PSLA 2011/18 Relevant factors - PSLA 2011/18PSLA 2011/18 the financial position of the debtor and the steps taken to make payment in the shortest possible timeframe having regard to the particular circumstances of the debtor the extent of any other debts owed by the debtor whether the revenue is placed at risk because of the actions of the debtor, such as the debtor making payment to other creditors in preference to paying the Commissioner the likely implications of issuing a notice on a debtor's ability to provide for a family or to maintain the viability of a business.

17. Freezing orders Brought under Court Rules in ordinary way

18. Departure prohibition orders Preclude leaving Australia without permission Federal Court has power to authorise

19. Director penalty notices Provisions amended and moved to Sch.1 of TAA – div. 269 Time limit for compliance with notices increased from 14 days to 21 days But service deemed upon posting

20. Bankruptcy/insolvency – PS LA 2011/16: case by case PS LA 2011/16 – conduct of taxpayer relevant to decision – debt usually not open to dispute but otherwise usual rules

21. Criminal jeopardy - determine first – affects process and recovery process consequences of admissions/especially on oath onus of proof if serious charges - continually review during process bear in mind absolute and strict liability can be serious consequences even for “minor” offences - ATO conviction policy