The ATO recently updated its webpage outlining the time limits for objecting to tax assessments and other decisions it has made.
DBA Lawyers director Daniel Butler said there are myriad objections and different deadlines apply, which means advisers should not be complacent when it comes to advising clients on their legal rights to object.
While a taxpayer typically has four years to object against a tax assessment, in some cases a simplified taxpayer may only have two years to object.
“However, when it comes to superannuation matters the period may be much shorter and in certain cases you only get 60 days. For example, for a superannuation guarantee charge or an administrative penalty, the taxpayer only has 60 days to object,” Mr Butler cautioned.
Mr Butler warned that busy advisers may overlook these deadlines and there are significant claims against advisers for overlooking them.
“Advisers therefore need to be on top of their game, make sure they are aware of the relevant deadline well in advance, and then notify their client of the due date to firm up instructions and background details to be able to lodge well within the deadline.”
Advisers and their clients should also be aware that an objection needs to raise every relevant point or argument, he advised, otherwise they may not get the opportunity to add to their objection at a later time.
Considerable time should be spent in getting the objection right, he said. Mr Butler said when preparing objections, he will often have a tax barrister review and settle the objection to ensure all the relevant points have been covered.
Advisers who are registered tax agents can provide advice and assistance on objections without being a qualified lawyer, he explained.
“However, SMSF and other advisers that are not registered tax agents cannot assist with regards to an objection,” he noted.
In terms of advisers providing tax (financial) advice services, Mr Butler said the landscape has become more complicated since 1 January this year, when the registration process for relevant providers changed due to the commencement of the Better Advice Act.
A tax (financial) advice service is a tax agent service (excluding representing a client to the Commissioner of Taxation) provided by an individual or entity in the course of advice usually given by them. For relevant providers, that is the provision of personal advice to retail clients on relevant products, he explained.
The service must relate to ascertaining or advising about obligations under taxation law and must be provided in circumstances where the client can reasonably be expected to rely on the service for taxation purposes.
“However, as noted, these services do not cover representing a client to the Commissioner of Taxation including the lodgement of an objection,” said Mr Butler.
He also pointed out that while registered tax agents are able to give tax advice under the Tax Agents Service Act 2009 (Cth) even though it is legal advice, only lawyers can give advice on state and territory laws.
“Despite this, many advisers do provide legal advice and often do not realise they are doing so without any professional indemnity insurance cover,” he said.
