Small businesses are spending more than $1 million in legal fees to challenge decisions handed down by the Australian Taxation Office (ATO), but an official reimbursement program offers “insufficient certainty” over what costs are actually covered, according to a new review by the tax office watchdog.
On Monday, Inspector-General of Taxation and Taxation Ombudsman (IGTO) Karen Payne handed down her report on the Small Business Litigation Program, a scheme that provides financial backup to small businesses which contest decisions made by the tax office in the Administrative Appeals Tribunal (AAT).
Launched in 2019, the program recognises the significant power imbalance between the ATO, both in terms of funding and legal representation, compared to the small business challengers, which may require costly legal representation to effectively make their case.
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