ATO Practice Statement Law Administration

PS LA 2003/7

How to treat a request to lodge a late objection

• The Administrative Review Tribunal (ART) was established by the Administrative Review Tribunal Act 2024 and commenced operations on 14 October 2024, replacing the Administrative Appeals Tribunal (AAT).

  In this Practice Statement, a reference to a right to seek review of a reviewable objection decision or an extension of time refusal decision in the AAT should instead be read as a reference to a review in the ART.

  This document has changed over time. View its history.

1. What this Practice Statement is about

We have the discretion to treat a late objection as if it had been lodged within the required period.^[1]

This discretion is an exception to the general rule. The purpose of the discretion is to avoid injustice being caused in a particular case because of the rigid application of a time limit.

This Practice Statement provides guidance on when an extension of time can be granted to late objections. It must be worked out by considering the factors set out in section 4 of this Practice Statement. That process should be approached recognising that the Australian Parliament has entrusted to the Commissioner a discretionary power to extend the time limit in appropriate circumstances.^[2]

All legislative references in this Practice Statement are to the Taxation Administration Act 1953 (TAA), unless otherwise indicated.

2. What must a taxpayer do to have the out of time objection considered as if it was lodged within time?

If a taxpayer wants to object to a decision but the time limit has passed, they can lodge the objection together with a written request asking that the objection be treated as if it had been lodged within time (the 'late objection').^[3]

The written request should include an explanation of why the objection was lodged late.^[4] If the explanation seems inadequate, give the taxpayer the opportunity to provide further information or a better explanation. It is not essential that they do and, even if they do not, the absence of a detailed explanation should not be the sole reason for refusing to agree to extend the time. You must consider the explanation together with other factors in arriving at a decision (refer to section 4 of this Practice Statement).

If a request has been received without the objection you will need to ask the taxpayer to lodge the objection. You cannot consider the request until the objection has been received.

3. Out of time objection lodged within amendment period to amend

Where an out of time objection has been lodged without a written request, but within the time limit allowed to amend an assessment, and the claim is reasonable and likely to be allowed in full, it is not necessary to ask the taxpayer to lodge a written request. The late objection is to be treated as an amendment request.^[5]

But if there is some doubt the claim is allowable, then the taxpayer needs to lodge a written request asking that the out of time objection be considered as if it had been lodged within time.

4. Factors you should take into account

You need to weigh up all relevant factors, including:

•

the legislative purpose for having a limited objection period^[6]

•

whether the objection and the application for an extension of time was lodged by the taxpayer as soon as circumstances permitted

•

the taxpayer's explanation for failing to lodge the objection within the time limit (in certain cases the explanation itself may be so compelling that you may not need to consider other factors)

•

the circumstances of the delay, including

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the duration of the delay (a delay of several years would require better explanation than a delay of a few days)

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the extent to which the taxpayer kept us informed that they did not agree with the decision and has taken steps to contest the decision

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whether a negligent failure to follow instructions on the part of an advisor contributed to the delay

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whether the taxpayer was informed that they could object but did not do so

•

whether the taxpayer has an arguable case that the objection should be allowed in full or in part (do not undertake a full-scale investigation of the merits of the issue)

•

whether the Commissioner's consideration of the objection is prejudiced by reason of the delay, including

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where material documents have been lost, destroyed or are no longer available

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where witnesses have disappeared or their recollections have faded, and

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where avenues of useful enquiry have dried up or have become difficult to pursue

•

whether the delay is explained, in whole or in part, by an intent to allow a period of review of the correct taxpayer and the correct tax period, as contended in the objection, to expire

•

any other matter that the circumstances of the case make relevant.

5. Circumstances in which extensions of time will be appropriate

You must decide each case on its own merits. In considering the explanation of delay, and provided there are no other relevant matters, you would generally allow an extension of time if:

•

the taxpayer was too ill to lodge an objection

•

the taxpayer was overseas, did not return until the time limit had expired and it is shown that, in all the circumstances, those matters prevented the taxpayer from lodging an objection within time

•

the taxpayer did not know about and did not receive the taxation decision because

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it was sent to the wrong address, or

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there were problems with the mail service

•

the taxpayer thought that lodging an objection was futile until a court decision - or a change in legislation or a public ruling - delivered shortly after the time limit expired made the objection reasonable

•

the taxpayer thought that lodging an objection was futile but then discovered they may have believed this because we gave them incorrect information

•

the issue involves an important question of law or practice

•

the taxpayer has a strong case and has previously advised us before the time limit expired that they did not accept the decision and would be lodging an objection

•

the taxpayer has a strong case for allowing the objection, and had requested an extension within a period for which there is a reasonable explanation for the delay

•

the delay in lodging an objection in time was caused by our conduct

•

the taxpayer's adviser, despite receiving prompt instructions, was negligent and failed to execute those instructions

•

an individual or small business with a 2-year time limit has lodged, within 4 years, an objection that discloses an arguable case for the objection to be allowed in full or in part.

6. Circumstances in which extensions of time may not be appropriate

Again, you must decide each case on its own merits but you would normally not allow an extension of time if:

•

despite receiving prompts from us, the taxpayer has not explained why they did not object within time

•

the only explanation for delay is that the taxpayer has changed advisor

•

it has been an excessively long time since the taxation decision was made and the taxpayer has not offered a satisfactory explanation for the delay

•

if an administrative decision is being challenged and documents have been destroyed or the decision maker has left, and we therefore cannot recall all of the circumstances for making that decision

•

granting an extension would prevent us from conducting our operations fairly and efficiently

•

granting an extension would be contrary to the public interest, for example where the extension would re-open a matter that has already been settled

•

despite having advisers, it was the taxpayer's own decision that led to the failure to lodge a timely objection

•

an individual or a small business with a 2-year time limit has lodged an objection within 4 years that does not disclose an arguable case for the objection to be allowed in full or in part.

7. Notify the taxpayer

If you refuse a request for an extension of time you must give the taxpayer written notice of that decision.

You must note all the factors you considered and how you weighted their relevance to your final decision. For example, you might say that 'the objection does not disclose an arguable case', or 'the prejudice against the taxpayer is outweighed by the prejudice against the Commissioner'.

8. Contesting our decision

If we refuse to grant an extension and the taxpayer is not satisfied with that, they may apply to the Administrative Appeals Tribunal to have the decision reviewed.^[7]

9. More information

The leading case concerning this discretion may provide more guidance for you. See Brown v Commissioner of Taxation [1999] FCA 563, per Hill J.

For more information, see:

•

How to object to a decision - on how taxpayers should object to a decision

•

Decisions you can object to and time limits - on the ATO decisions against which taxpayers can object

•

On the information we provide to taxpayers about requesting an extension of time to object, see Application for extension of time to lodge an objection: Objections

Amendment history

Date of Issue: 30 July 2003

Date of Effect: 30 July 2003

File 2003/85131

Legislative References:
TAA 1953 14ZQ
TAA 1953 14ZW
TAA 1953 14ZW(2)
TAA 1953 14ZW(3)
TAA 1953 14ZX
TAA 1953 14ZX(4)

Case References:

Brown v. FC of T
[1999] FCA 563
99 ATC 4516
(1999) 42 ATR 118

Business Line:  OAR