Administrative Appeals Tribunal
In an application to the Administrative Appeals Tribunal or an appeal to the Federal Court, the taxpayer has the burden of proving that an assessment is excessive or otherwise incorrect and what the assessment should have been (see sections 14ZZK and 14ZZO of the Taxation Administration Act 1953 (Cth)).
Explain the burden of proof and what the taxpayer must do to discharge it by reference to case law and the rules of evidence (as applicable).
Administrative Appeals Tribunal helps in the independent review of decisions which have already been passed by the Australian Government. The Administrative Appeals Tribunal is an Australian tribunal that works independently and conducts a review of the decisions which are made by the Australian Court. The Australian Courts are guided by Common Law and the Australian Courts follow Commonwealth laws. The Administrative Appeals Tribunal conducts merit assessment of the judgments of these courts. The Administrative Appeals Tribunal not only examines the merits of the Australian Courts but also reviews the decisions made by Australian Governmental ministers, their departments and agencies. The Administrative Appeals Tribunal has unlimited powers when it comes to reviewing the decisions of the apex authorities of the State. Along with governmental bodies, even non governmental bodies also come under the review system of the Administrative Appeals Tribunal. The Administrative Appeals Tribunal does not enjoy the status of a court but it functions like a court and also executes the duties of a court. The Administrative Appeals Tribunal does not find itself in the Australian Court hierarchy but it enjoys the status of a court. The decisions of the Administrative Appeals Tribunal are subject to review and the reviews are conducted by the Federal Court of Australia and the Federal Circuit Court of Australia. The Administrative Appeals Tribunal Act 1975 set up the Administrative Appeals Tribunal and the Tribunal stared functioning in the year 1976.
The Administrative Appeals Tribunal does not have a specific jurisdiction in reviewing administrative decisions and they review a wide range of cases arising in different courts. The Administrative Appeals Tribunal also reviews various tax decisions and also reviews decisions that are commercial in nature. All the applications made to the Taxation and Commercial Division is appealed by the Administrative Appeals Tribunal. All taxation and commercial decisions are reviewed by Tribunal. A tribunal is not given the status of a court by the Australian legislative system. The appeals are done in accordance to the facts and also in accordance with the needs of the parties. The Administrative Appeals Tribunal exercise flexibility in reviewing the cases. The conflict between the parties is sometimes resolved by holding a conference or by appointing arbitrators. Arbitration, mediation and conciliation helps in reaching a decision and resolving conflicts. If the conflicts are not resolved with the help of applying alternate dispute resolution, the matter is taken up by the Court. The process of the Administrative Appeals Tribunal is expedited with the help of making a written application the Tribunal. The review process of the Tribunal is very fair, quick and economical.
Review of Decisions
The Australian Tax Office is the government’s principal tax collecting agent and is in charge of collecting taxes from the citizens. The role of the Australian Tax Office is to conduct and manage the tax collection and revenue generation in Australia. The Australian Constitution under section 55 states that the Commonwealth parliament must ensure that all matters related to tax are dealt separately and that gave rise to a lot of taxation laws that deal with only one subject of tax. The Australian Taxation Office bridges the gap between the rights of the taxpayers and also the revenue generation of the state. On one hand there is a need to protect and preserve the rights of the taxpayers and on the other hand there is a mandate that the taxpaying system has to comply with the already laid down rules by the Australian Taxation Office. The aim of the analysis of the burden of proof is to first establish the rights of the taxpayers and then check if their rights are enforceable in the court of law or not.
The rights of the taxpayers are important not only for the taxpayers themselves, but also for the administration of the state authorities. Complying with the principles of the system is of utmost importance. The commonwealth legislations and the common law principles guide the principles of taxation in Australia. The Australian taxpayers enjoy certain rights which are granted by the ATO. The ATO examines unlimited powers and discretion in cases of tax. The best right granted to a taxpayer is the right to appeal in cases he is not satisfied with the decision of the courts. The Commissioner enjoys various rights and powers and in cases of discrepancies in the judgment of the Commissioner, the taxpayer shall make an appeal to the Tribunal. The taxpayer has the right to appeal against an adverse decision to a tribunal or an independent court which shall not be biased in giving a judgment. The right to appeal will only subsist in the case of a taxpayer’s claim if he has already made the assessment. Tax law in Australia is statute based and some concepts of the financial and economic laws are determined by common law. The Commonwealth Parliament governs matters related to taxation in Australia and the powers granted to the Parliament are by virtue of commonwealth laws. The Australian tax system focuses mainly on the taxation on income. The tax system also takes into consideration the benefits the employees receive from their employers and they are also taxed by the taxation system. The Taxation Administration Act is an exclusive statute that deals with all the aspects of taxation. The TAA also handles all matters of appeals arising out of orders and offences related to taxation.
Australian Taxation Office
The taxation system has evolved a lot since 1986 after Australia incorporated the principle of “self assessment” which has reformed the taxation system. the system believes that the taxpayers shall be responsible for themselves and also believes that the taxpayers shall comply with all the rules and regulations. This system heavily relies on the compliance of the taxpayers. Since the coming of the “self assessment” system, the ATO has stopped scrutinizing the tax returns before the assessment is made by the taxpayers. The workload of the ATO has reduced considerably after the implementation of the self assessment system. the assessments issued by the ATO is the determination that the taxpayers make. The assessment is considered to be the right assessment done by the taxpayers and it is accept as the correct representation of his income and liability. The Commissioner has been given some powers in checking the veracity of the assessment that has been made by the taxpayer. Australian taxation law takes into account post assessment audits that check the authority from financial institutions and companies. The Commissioner has the power to amend an assessment after its issuance and also after the assessed tax has been paid. In cases if it found that the audits are not similar to the declaration made by the taxpayer, the Commissioner has the right to issue penalties in that regard. The taxpayer should act with care and should not make declarations that are wrong or false. In case, if it is found that a taxpayer has understated his tax liability, the Commissioner can impose penalties. To help lessen the load of the taxpayers, in the year 1986 a new regulation came into place which were binding on the Commissioner. These public and private rulings aim to assist the taxpayers and help decrease their liability. Under the new 1986 rulings, the time period within which the taper could make an objection had been extended. The taxpayer was given more rights, like the right to appeal and raise objection in cases they had some problem with the decision of the Commissioner. The timeline has been extended and more time had been given to the taxpayer to make objections regarding assessments. The department in charge of ensuring that the tax system works efficiently is the Commissioner of Taxation. The Commissioner of Tax is the sole authority and the primary decision maker when it comes to taxation. The Commissioner of Tax helps in checking the determination made by the taxpayer. All the functions and powers regarding the assessment of tax are conducted by the Commissioner of Taxation. The Parliament has conferred enormous responsibilities on the Commissioner and it is on the Commissioner to make sure that the duties are executed by him properly. Due to large tax receipts, the general administration of tax collection becomes a lengthy process and therefore, the primary goal of the Commissioner is to make sure that the problems of tax evasion and tax avoidance are taken care of. Many Australians try to dodge tax and do not pay on time and sometimes they even avoid paying taxes altogether. In such cases, the work of the Commissioner increases as it is his duty to make sure that taxes are paid properly and by everybody. All the problems of the taxation cannot involve a lot of budget and these problems should be resolve within a small budget because the Government will not spend a huge amount of money on tax evasion.
Taxpayer Rights
The Commissioner looks after the statutory requirements that need to be abided by the taxpayers and also the administrative functions which need to be executed by the government. The Commissioner has the power to amend and make default assessments and also penalize a taxpayer if he has not exercised duty of care while making assessments. The taxpayer ahs to exercise reasonable care while exercising his duty to make tax payments. There are both public and private mandates that state the behavior of how the ATO has to conduct his business. These are rules which cannot be considered formal law and are not binding per se. The Commissioner does not have the power to make laws and also does not have the power to interfere in the rules made by the Courts. The Commissioner is responsible for the smooth functioning for the taxation system in Australia and therefore, he can only make sure that the orders of the3 courts are enforced. The Commissioner has discretionary powers and also helps the taxpayer is assessing the extent of his rights. Many a time an appeal is preferred on the decision of the Commissioner and the taxpayer has been given the right to seek independent review in cases when the taxpayer is not satisfied with the decision of the Commissioner. Even though a Commissioner applies his discretionary power to make a judgment or pass an order, the taxpayer is not precluded from making an appeal to the tribunal on the orders of the Commissioner. The ATO has powers to pass rulings and these cannot be considered formal laws, hence the practices of the ATO can fall under the purview of “informal law.” The taxpayers accept these as formal rulings and also consider them the best interpretation of the law in understanding their rights. The taxation law in Australia recognizes a uniform taxation appeal forum and holds that under section 14ZZ the taxpayer has to first lodge the objection against an order. The lodgment of the complaint has to be in writing. It is the duty of the Commissioner to inform the taxpayer about his rights and tell him on the ways to make further appeal and also about the fee structure and the process of review. If the taxpayer is not satisfied with the decision of the Commissioner, he can make an appeal to the AAT under the heading of “Reviewable objection decision” or make an appeal to the Federal Court.
Self-Assessment System
Under the new amendment made to the process of amendment, the new rule that applies to taxpayers is that they shall be held guilty until they can prove themselves innocent. The amendment was done by the Commissioner of Taxation and it was held that the taxpayer has to clear his name in a conflict situation and prove that he is innocent and has not committed any default or fraud while making his assessment. This new amendment is not to buttress the Commissioner’s superiority or prove his supreme but the Australian laws are written so as to put the blame mostly on the taxpayers. Therefore, in cases a situation arises so that the taxpayer is held guilty of not making proper assessment, it is imperative for him to keep proper record of all the revenues and expenses. The taxpayer must keep a proper record of all the payments he has made and the information he has provided in the annual income tax return. The Administrative Appeals Tribunal has time and again emphasized on the importance of keeping a succinct and proper record so that whenever a taxpayer is accused and found guilty, he can prove that he is innocent and has not committed any crime. If a taxpayer maintains proper record in that case he can substantiate his claim by saying that the claims made by him were correct and were the original lodgments. The records can be good proof of the innocence of the taxpayer and he can also disprove any assertion made by the Commissioner. Under Australian law, heavy onus is placed on the taxpayer to prove his assessment and this was recently highlighted by an appeal case that was heard by the AAT. The taxpayer tried to disprove all the claims made by the ATO and held that the ATO’s assessment was wrong. The Tax Administration Act places heavy onus on the taxpayer. The term excessive denotes that the amount has far exceeded the normal amount that should have been. The rights of the taxpayer do not include only showing that the assessment was correct or that the Commissioner has made an error in coming to a judgment regarding the assessment. Only showing that the Commissioner made an error in the assessment is not enough. The taxpayer has to also show what the right method should have been, the correct position. The taxpayer has to go beyond the provisions of the Assessment Acts and show the correct position that have been and the assessment of the liability. The duty to prove the correctness of an assessment does not extend to the Commissioner and the Commissioner does not have to support any assessment with any evidence. There is no need for the Commissioner to back his assessment with evidence. In cases if the Commissioner is not providing any proof regarding the wrongful assessments made by the taxpayer, it is not that the taxpayer has been discharged of his liability. The Commissioner can be wrong in assessing the taxpayer’s assessable income but that does not discharge the taxpayer of his duties. The taxpayer under those circumstances is not discharged from the burden of proof to show that the assessment has been excessive.
Post-Assessment Audits
“Self-serving evidence” is dealt with high level of scrutiny and also attracts many critique. Self-serving evidence is done by any witness who has a personal interest in the evidence that has been accepted. Self serving evidences include the sworn statements of the taxpayers. These are accepted with immense analysis and caution. Under Section 14ZZK, the applicant has the burden of proving in cases of assessment that the assessment is excessive or incorrect and also state what the actual assessment should have been. In cases when the taxation decision is not concerned with the assessment, and in cases of other instances, the taxpayer has the onus to prove what the taxation should have been or how the taxation should have been different. The self serving service has to be corroborated by all factual evidences and external proof. It is essential for the taxpayer to make a proper analysis of his assessments and keep the documents handy. Keeping all the records according to the requirements of the Taxation Act should be done by every investor and businessman.
In most cases, the taxation authorities impose penalties and therefore they have more burdens of proof in checking the assessment of the taxpayers. The Commissioner has discretionary powers in deciding the penalty. In Australia, the burden of proof extends to proving why the taxpayer has failed to make the payments according to the provisions of the Act. The taxpayer has to answer all the questions of the Commissioner and has the burden to prove that he has filed all the returns on time and according to the provisions of the Act. There has been several criticism of this doctrine that places the burden on the taxpayer to prove that he is not guilty and that he has filed all the returns according to the provisions of the legislature. In taxation matters of civil nature, the burden of proof is again on the preponderance of evidence and that is done by one party showing that his claims are right against the other party. The taxpayer has to prove the merits of his case and also show that his claims are right as opposed to that of the other party. If the taxpayer is accused of a fraudulent intent, it is important for the taxpayer to prove that his evidences are clear and there is convincing reasons to believe that his claims are true. In cases of criminal taxation matters, the burden is heavier and severe scrutiny is done of the records because criminal taxation matters require more caution. The taxpayer in Australia now has to show that all the returns have been done correctly and the evidences need to show that the credits, refunds have been filed properly.
Penalties
Therefore, to protect the interests of the taxpayer, there needs to be some burden on the Commissioner to check that the laws do not against the taxpayer. The taxpayer ahs to eb always on their toes and keep their records in check. The only way to prove the innocence is to keep all the documents handy and scrutinized properly. Though, the taxpayer has a right to appeal but initially, the battle is to prove that he has not committed any fraud and has acted in the normal course of time and ahs executed his duties. The taxpayer has to prove that he has complied with all the provisions of the legislature and has no intention to defraud the government and make profit unlawfully. The taxpayer is duty bound to make all the correct assessments and not make any wrong o false claims in his records
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