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The professional body is urging the Tax Ombudsman to analyse the ATO’s powers under section 167 of the Income Tax Assessment Act and its reliance on burden of proof as part of the systemic reviews.
CPA calls on Tax Ombudsman to home in on ATO
02 June 2025
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9 minute read
CPA Australia has voiced support for the Inspector-General of Taxation and Taxation Ombudsman (IGTO) 2025/2026 systemic reviews and has called for the Asset Betterment Calculations and the ATO's reliance on the burden of proof to be added to the list of considerations.
In a submission to the ombudsman, the professional body also outlined the ATO’s management of compromised accounts and its response to fraud perpetrated by known parties to be two initiatives that were of utmost importance to its members.
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“We support the IGTO’s proposed topics and commend IGTO’s continued focus on systemic improvement. We also encourage future work that addresses the broader regulatory and communication challenges faced by agents – especially those working in small practices – who are foundational to the integrity and efficiency of the Australian tac system,” CPA said.
“We see the two initiatives as very important for our members, basically because when these matters arise, they can have a major negative impact on taxpayers who are often completely innocent parties.”
In the context of standard ATO reviews, the body noted there to be concern as in one instance there had been documents obtained under Freedom of Information that revealed internal ATO commentary acknowledging that “our arguments aren’t the strongest in some parts, but the onus is on the taxpayer to demonstrate their position”.
According to CPA Australia, this was “not a case of insufficient evidence” as multiple rounds of information had been provided, including data from reportable financial institutions and third-party notices issued under section 353-10, all of which corroborated the taxpayer’s position.
The submission also pushed for a review of the Asset Betterment Calculations/section 167 default assessment system, as members had expressed concerns about the ATO’s powers under section 167 of the Income Tax Assessment Act 1997.
The concerns raised in relation to the context of asset betterment assessments, as in some cases, amounts had been included in default assessments that shouldn’t have been, with the burden then placed on the taxpayer to disprove them.
CPA said this approach could be problematic in the instance that the taxpayer lacked the financial means to challenge the assessment and pro bono legal assistance was unavailable.
“There are currently no legal consequences for the ATO in adopting this approach, even where the assessment process may lead to unfair outcomes. While many affected taxpayers will seek recourse through the Administrative Review Tribunal (ART), often due to cost constraints or factual disputes, the current framework offers limited safeguards,” CPA said.
“We believe this issue warrants review – particularly whether greater accountability measures could be introduced, such as the ATO bearing costs in certain circumstances, even in ART proceedings.”
Following these topics, the body noted that the ATO’s management of the remission of general interest charge, Payday Super readiness, ATO’s administration of disclosure of business tax debts to credit reporting bureaus and the Tax Practitioner’s Board management of referrals of breaches of the updated Code of Conduct should also be considered as “high priority”.
“At the end of the day, agents are working to help their clients meet their obligations and, in doing so, support the ATO in the timely and accurate collection of tax revenue.”
In response to the submission, the ATO told Accountants Daily that the ombudsman’s systemic reviews provided it with an opportunity to work towards its “vision”.
“The ATO recognises the important role that external scrutineers play in improving the administration of the tax and superannuation systems,” a Tax Office spokesperson said.
“This includes Tax Ombudsman consultation with the ATO and other stakeholders regarding its forward work plan of systemic reviews. Tax Ombudsman reviews provide an opportunity to improve how we deliver against our vision.”
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