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Commissioner’s opinion on fraud, evasion may create ‘incontestable tax’, government warned


Tax advisers have raised concerns over a section of the Income Tax Assessment Act that opens the door to an indefinite period for the commissioner to amend assessments on the suspicion of fraud or evasion.

By Jotham Lian 12 minute read

In a presentation at the Tax Institute’s National Convention last week, David Marks, Queen’s Counsel, Inns of Court, noted that fraud or evasion in terms of section 170 of the Income Tax Assessment Act 1936 opens the door to an unlimited time for amendment, regardless of the taxing provisions concerned.

Item 5 in section 170(1) states that “the Commissioner may amend an assessment at any time if he or she is of the opinion there has been fraud or evasion”, going beyond statutory time limits applying for amending income tax assessments of two or four years.

“Anyone who has ever acted for a taxpayer who is accused of fraud or evasion will know that the accusation stings,” Mr Marks said.


“On the other side is a revenue authority suddenly less willing to compromise or discuss matters with someone they regard as having not been straightforward with the ATO.

“With multiple past years of tax assessments, together with the high level of penalty, and the burden of interest going back possibly more than a decade, you have a problem which is often insoluble in monetary terms.”

ATO second commissioner Andrew Mills confirmed that the tax office makes about 50 opinions each year.

Raising the concerns before Assistant Treasurer Stuart Robert, tax barrister John Morgan said the word “opinion” could create an incontestable tax.

“The test is whether it is in [the commissioner’s] opinion that there’s been fraud or evasion, and that’s a problem because we’ve created an almost incontestable tax under that opinion-based system,” Mr Morgan said.

“If we can get rid of the word ‘opinion’, then we would have a much fairer tax system, and as you said, grace is an amazing thing.”

In response, Mr Robert said that he would revisit the act to see if it was fit for purpose, but he noted the complexity in dealing with matters of opinion.

“These complex things, especially when they are rooted in history, deserve to be reviewed,” Mr Robert said.

“Those ancient provisions, as I call them, many of which were put in place for very different purposes, we are quite adept at looking at.”

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Jotham Lian

Jotham Lian


Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.

Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.

You can email Jotham at: This email address is being protected from spambots. You need JavaScript enabled to view it. 

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