Who is eligible?
The ATO is committed to supporting small business to manage their disputes with the ATO in the Administrative Appeals Tribunal, or in the Administrative Review Tribunal (tribunal).
If you are a small business in dispute with the ATO in the tribunal, you may be eligible for litigation funding of your reasonable legal expenses under the Small Business Litigation Funding program if the following criteria and expectations are met.
Criteria
You must meet the following 3 criteria to apply for funding:
- You are a small business (sole trader, partnership, company, or trust). This means for the year in dispute you
- operated a business for all or part of the income year; and
- had a turnover less than $10 million.
- The tribunal confirms
- the dispute is in the correct division of tribunal; and
- you are not, and have not been, legally represented in the tribunal in the dispute.
- The ATO has engaged external legal representation in the tribunal dispute. The date the ATO decides to engage external legal representation is the date that your eligibility for funding starts.
Expectations
Once the criteria above have been met, the ATO will consider your application for funding.
The ATO will need to be satisfied of the following:
- The legal representative chosen by the small business must not be a related party to that small business to avoid conflict-of-interest issues. Examples of related parties are a legal representative who is
- a director or shareholder of the small business; or
- a family member of a director or shareholder of the small business.
- The matter must not involve
- a tax avoidance scheme; or
- a scheme to avoid superannuation regulatory provisions; or
- fraud or evasion where a formal finding has been made by the Commissioner. This will usually be stated in the reasons for decision issued to you by the ATO; or
- cash economy issues.
- The matter must not appear to be an attempt to gain a windfall or an outcome contrary to the original intent of the legislation or public policy.
- You must not have a history of failing to lodge returns, or not lodging returns on time, or failing to respond to informal or formal requests made by the Commissioner for information.
In addition to the criteria and expectations, the small business and their legal representatives, must demonstrate their willingness to progress the dispute in a timely and efficient manner to avoid delays. Any indication of a lack of such willingness (based on past or current behaviour), may result in the cessation of funding unless a different legal practitioner is engaged.
If you are eligible for small business litigation funding and accept our offer, you will be given a funding deed containing the terms for funding. You and a representative of the ATO will need to sign the deed before small business litigation funding can start.
Funding under the program may cover some or all of your reasonable legal costs related to progressing a funded tribunal matter. It doesn't cover tax agent or accountant fees and is paid at the discretion of the ATO.
Contact us
For more information about small business litigation funding:
- Phone 13 28 69 between 8:00 am and 5:00 pm Monday to Friday and ask for the Test Case Litigation Program
- Email ATOLitigationFunding@ato.gov.au
- Write to:
Small Business Litigation Funding
Australian Taxation Office
GPO Box 4889
Sydney NSW 2001
If you do not speak English well and need help from the ATO, phone the Translating and Interpreting Service on 13 14 50.
If you are deaf or have a hearing or speech impairment, phone us through the National Relay Service (NRS) on the following numbers listed:
- TTY users, phone 13 36 77 and ask for the ATO number you need
- Speak and Listen (speech-to-speech relay) users, phone 1300 555 727 and ask for the ATO number you need
- internet relay users, connect to the NRSExternal Link and ask for the ATO number you need.