‘Time to time’ objection allocation delays could be a resourcing issue, tax lawyer says

With objections reportedly facing a six-month wait before they are allocated to a case officer, Waterhouse Tax Lawyers managing partner Tania Waterhouse told Accountants Daily that she was informed 7,000 objections are awaiting allocation.

“In the past, it's [taken] 3 months. And during that 3 months [General Interest Charge] is accruing, and if [the taxpayer is] successful, that GIC will go away. But if the GIC doesn't go away, and they apparently have changed policy without notice to anybody…it's now 6 months for a case officer to be allocated to an objection,” Waterhouse said.

These delays could be due to the ATO prioritising its resourcing on debt recovery.

“The scale’s enormous … the debt recovery, and they're vicious, you know, really vicious,” Waterhouse said.

“Contrast this with ATO debt which is having resources thrown at it. I believe the priorities are wrong,” she wrote in a recent LinkedIn post.

On the ATO website’s “how we manage your objection” page, it says: “From time to time, there may be delays in appointing a case officer because of higher-than-usual demands, but we will let you know as soon as your case officer is appointed.”

“We acknowledge an objection soon after its received and provide a reference and contact number. The time which an objection will be allocated will be dependent on a range of factors such as whether it’s a valid objection or whether all the relevant information was provided,” the ATO told Accountants Daily in a statement.

“Generally, where all the relevant information is provided with the objection this will result in a more efficient allocation to an objection officer.

“Many of our objections relate to substantial text debts … the ATO will generally agree to stay until the objection has been determined,” Waterhouse said.

“But in the meantime, the taxpayer is very, very anxious about it. They've got a tax debt, hovering over them and whether or not the ATO will take recovery action,” she added.

In a statement provided to Accountants Daily, tax ombudsman Ruth Owen said: “I am concerned to hear from the tax profession that they are experiencing delays in the ATO processing of objections.”

“Objections are an important aspect of the tax system. For many Australians it is the only viable channel to seek a review or overturn a decision by the ATO due to the costs and complexity associated with legal reviews. All taxpayers need to have confidence that there are efficient and timely channels by which they can challenge a decision of the ATO,” Owen said.

“I will be following up with the ATO to understand the latest service standards.”

In the ombudsman’s report on the state of objections released in October 2024, Owen recommended changes for a quicker objection process. 

“Objections are an essential part of the tax system and are often the only affordable option open to many taxpayers to challenge Tax Office decisions. It is imperative that the function is easily accessed and operates without undue delays,” she said on the release of the report.

In late 2024, the ombudsman found that the ATO resolved 30,429 objections in FY24 – approximately 30 per cent more than the previous year. If the figure is, in fact, 70,000 in the backlog, that means it is over 100 per cent more than what was resolved back in FY24.

During this time, the Ombudsman said: “Objections to the Tax Office are generally how taxpayers can challenge a decision of the ATO. However, the process has also become clogged with over half (55 per cent) of those objections received not challenging a decision.”