I recently received an email from a client of mine, detailing an unfortunate situation where his father-in-law had been incorrectly assessed by the ATO. Despite being retired for many years, the father-in-law had been making payments for a default assessment on a property sale some years before. The property was a corner block which was listed as a primary residence on one of the streets. When the other street name came up in the sale documents, the ATO thought it was a different property and applied Capital Gains Tax to the sale. It was only after the man’s death that the son-in-law disputed the claim and rightfully received full credit on the assessment.
Like many Australians, the father-in-law had simply assumed that the ATO must be right, so he entered into the repayment plan without question. If you think you may have been incorrectly assessed, you are well within your rights to dispute the issue, either directly with the ATO, or discuss the matter with your accountant first.
So what do you need to do if you plan to dispute an assessment?
Act fast. That’s not to say rush the process without checking your facts and records, but there are time limits varying from 60 days to four years, so don’t add it to the ‘maybe when I do next year’s tax’ pile of paperwork! Most income tax assessments have a two year time limit on them, while many small business and GST related issues need to be disputed within sixty days. Again, if you aren’t sure, contact a professional.
According to the ATO website:
“The time starts from the date the assessment or notice of decision was given to you, which is generally taken to be the date our assessment, notice, ruling, demand, decision or other correspondence was delivered to you or your representative in the usual course of the post.”
However, if the last day for lodgement falls on a non-business day such as the weekend or a public holiday, you can still lodge on the next business day afterwards.
Another point to be aware of is that a private ruling by the Tax Commissioner on your case is considered legally binding on the ATO, so even if it turns out that the Commissioner makes a ruling in your favour in error, the ATO is obliged to honour that ruling.
So, if you have doubts about a recent ruling the ATO has made against you, hopefully now you will have the confidence to question the decision before it’s too late.
By Jennifer Lowe