Currently, small businesses objecting to their income tax assessments are not able to request the AAT to make orders relating to the operation or implementation of the decisions while they are under review.  Proposed legislation is intended to alter this by allowing small business entities to apply to the AAT for an order staying, or otherwise affecting, the operation or implementation of a decision of the Commissioner that is being reviewed by the AAT.

CA ANZ members that are involved with resolving tax disputes with the ATO are concerned that the burden of proof placed on small businesses by the exposure draft legislation is too great to achieve meaningful change.  Under the proposal the burden is on the small business taxpayer to satisfy the AAT of all the maters in the provision, such as that “the order is unlikely to undermine the objective or purpose of a taxation law”.  Placing such a high onus of proof on a small business (particularly an unrepresented one) enhances the Commissioner’s position and places an unrealistic burden of proof on a small business with limited resources and little or no legal expertise. 

This is contrary to the intent of this measure which is to provide a cheaper, faster and simpler way to pause the effects of a taxation decision on a small business entity.

There are also concerns that the AAT is inadequately resourced to take on this additional role.  Median times for the AAT to deal with a dispute in its small business division have increased from 5 weeks in 2019 to 27 weeks in 2022.