Tax Policy and Administration: Assessment, Review and Compliance
The administrative framework
Candidates must understand the assessment cycle: lodgment of returns, self-assessment, notices of assessment, amendment periods (commonly two years for individuals and four years for others), and the Commissioner's power to make default assessments. Know the taxpayer's obligation to keep records for five years, the substantiation rules, and the pay-as-you-go (PAYG) withholding and instalment systems.
Review and dispute resolution
Understand the objection process: a taxpayer lodges an objection within the statutory period (generally two years for private rulings and assessments, or four years for other decisions), the Commissioner decides, and the taxpayer may seek review by the Administrative Review Tribunal or appeal to the Federal Court. Know the difference between a private ruling (binding on the Commissioner for the applicant) and a public ruling.
Penalties and interest
Be able to identify the shortfall penalty base (often 25%, 50% or 75% depending on behaviour: failure to take reasonable care, recklessness, intentional disregard), the base penalty amount, and the general interest charge. Understand safe harbour provisions and the voluntary disclosure reductions.
Traps and rule of thumb
A frequent trap is confusing the objection period with the amendment period, or assuming an ATO ruling protects a taxpayer who did not follow its terms. Remember that the burden of proving an assessment is excessive lies with the taxpayer. Rule of thumb: reasonable care reduces penalties; deliberate evasion attracts the highest shortfall penalty and possible criminal referral.