There are many instances where we need the ATO to be on our side, for example, requesting interest and/or penalty remission, private rulings, Commissioner’s discretion.
Question
How can you best position your letters to the ATO to obtain a favourable outcome?
Answer
Understand the circumstances of the ATO person/s making the decision and tailor the letter to their needs.
Trung has over 12 years of experience working with the ATO and was involved in making such decisions. He provides the following tax tips:
Tax Tip
1. Make it easy for the ATO decision maker to accept your claim.
Firstly, understand that the decision maker does in fact want to give good news.
But not if the good news, which is favourable for your client, puts the decision maker at risk.
For example, if the ATO decision maker is anxious and/or worried the decision will be reviewed and over-turned, thus putting the decision maker at risk, the decision will be unfavourable so as to not put risk on the decision maker.
However, if the decision maker is not anxious and/or worried that the favourable decision will be over-turned, the decision will be favourable.
2. How to make it easy for the ATO decision maker
The circumstances of a decision maker is that they are bound by the rules placed upon, for example, public rulings (taxation, GST, Income tax, etc), practice statement law administration (PS LA) documents and ATO publicized documents.
Your letter must refer to these rules (at the beginning and throughout) to give ‘comfort’ to the decision maker that they are acting within the rules placed upon them when they provide a favourable decision.
The decision becomes ‘easy’ for the decision maker because your letter allows the decision maker to apply the rules and confirm they have been satisfied, which justifies a favourable decision.
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