Practice Statement Law Administration
PS LA 2012/1
| SUBJECT: | Management of high risk technical issues and engagement of officers in the Tax Counsel Network |
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| PURPOSE: | To outline the principles guiding the management of high risk technical issues, including the engagement of the Tax Counsel Network on those issues |
This version is no longer current. Please follow this link to view the current version. |
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This document has changed over time. View its history.
FOI status: may be released
| This practice statement is issued under the authority of the Commissioner of Taxation and must be read in conjunction with Law Administration Practice Statement PS LA 1998/1. It must be followed by tax officers unless doing so creates unintended consequences or where it is considered incorrect. Where this occurs, tax officers must follow their business line's escalation process. |
STATEMENT
1. This practice statement sets out the guiding principles behind the management of high risk[1] technical issues and the appropriate level of engagement of officers in the Tax Counsel Network on those issues.
Guiding principles
2. A group of high level tax technical experts are located within the Tax Counsel Network to support business lines in making technical decisions and to help the ATO in managing its highest risk technical issues.
3. Management of technical issues across the ATO is subject to the Enterprise Risk Management Framework.[2]
4. Correct application of the Enterprise Risk Management Framework ensures that technical issues are managed appropriately. This includes ensuring our high level technical expertise within the Tax Counsel Network is applied to those issues which have been assessed to be of the highest risk for the ATO. Application of the Enterprise Risk Management Framework also helps determine the appropriate level of engagement by technical officers in the Tax Counsel Network on those issues.
5. To assist in the effective application of the Enterprise Risk Management Framework to high risk technical issues, a Guide to managing high risk technical issues has been developed. This Guide should be used by all business lines when risk emerges from a technical issue, to help:
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- identify those issues on which officers in the Tax Counsel Network should be engaged - by focussing risk assessment of an issue on particular criteria
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- determine the extent to which officers in the Tax Counsel Network should be engaged, and the appropriate form of that engagement - based on the interaction between the level of risk, the nature of the issue, and other relevant factors such as time considerations.
A link to the Guide is contained in the Other References section at the end of this practice statement.
6. The principles underlying the responsibilities of business lines and officers in the Tax Counsel Network, and the manner in which they should work together in prioritising and resolving issues are also outlined in the Guide. This will include ensuring early engagement of technical specialists from the Tax Counsel Network when appropriate to the technical decision making process.
7. There should be a joint commitment by all business lines and officers in the Tax Counsel Network involved to ensuring we continue to meet the commitments we make in the Taxpayers' Charter and any relevant ATO service standards. There must also be a strong commitment to considering the practical implications of the technical decision, and to understand relevant commercial drivers for taxpayers when resolving issues.
8. Three categories of work have been recognised as having a level of inherent risk sufficient to require the engagement of Tax Counsel Network officers. These categories are:
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- the application of the general anti-avoidance rules
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- strategic litigation
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- public rulings
Although it is mandatory that officers in the Tax Counsel Network be engaged on these categories of work, in accordance with the guiding principles in this practice statement, the level of their engagement will be determined having regard to the specific issues and risks involved.
9. Additionally, law design work is recognised as having a level of inherent risk sufficient to support engagement of Tax Counsel Network officers. The Integrated Tax Design business line has stewardship of this work. Tax technical experts in the Integrated Tax Design business line will initially scope and assess the issues and risks associated with any law design work. The Integrated Tax Design business line will then engage the Tax Counsel Network, as appropriate.
10. Officers in the Tax Counsel Network are engaged to work on technical issues through the Work allocation, reporting and monitoring team in the Tax Counsel Network. Links to the procedures for doing so, and to the contacts within the Work allocation, reporting and monitoring team, are located in the Other References section at the end of this practice statement.
11. This practice statement does not preclude the use of informal dialogue and direct engagement between officers in business lines and the Tax Counsel Network (such as requests for special assistance by Senior Executive Service (SES) officers where an urgent need arises) in order to aid in analysis of technical issues. However, the Work allocation, reporting and monitoring team should be informed as soon as possible after this occurs where the engagement will involve any ongoing activity by the Tax Counsel Network, to confirm the level of risk and ongoing engagement.
Law Interpretation Forum
12. Strategic oversight will be through the Law Interpretation Forum. The Forum will focus on and shape the ATO's law interpretation practices and outcomes including:
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- ensuring that a whole of ATO approach is taken in relation to addressing risks and priorities for law interpretation matters,
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- ensuring that the right risks are managed at the right time,
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- improving the effectiveness and timeliness of our law interpretation work,
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- making connections between law interpretation and the implications for policy, dispute resolution and litigation, and
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- providing direction on building the law interpretation capability across the ATO.
Amendment history
| Date of amendment | Part | Comment |
|---|---|---|
| 11 October 2013 | All | Updated Law and Practice to the Tax Counsel Network |
| Paragraph 1 | Removed footnote reference to Legal Services Branch | |
| Paragraph 8 | Removed law design from the categories of work that are mandatory to come to TCN | |
| Paragraph 9 | Inserted to acknowledge the role of Integrated Tax Design, and recognise tax design work as having a level of inherent risk sufficient to support engagement of Tax Counsel Network officers | |
| Paragraphs 11 and 12 | Revised content to indicate that oversight of TCN priorities will be through the Law Interpretation Forum. | |
| 31 August 2012 | Paragraphs 9 and 10, Other references | Updated name of Work allocation, reporting and monitoring team |
Date of Issue: 10 April 2012
Date of Effect: 10 April 2012
In this practice statement, 'high risk' is used in a generic sense, not as a reference to a particular risk matrix level. How this practice statement applies across specific risk matrix levels is explained in the Guide to managing high risk technical issues - see paragraph 5 of this practice statement.
As outlined in Corporate Management Practice Statement PS CM 2003/02 Risk and issues management
File 1-3PWASXG / 1-4VOFOAP
Related Practice Statements:
PS CM 2003/02
Other References:
Guide to managing high risk technical issues (internal link only)
How to engage Tax Counsel Network (TCN) - technical engagement process (internal link only)
Subject References:
Enterprise risk management framework
technical issues
Deborah Hastings
| Other Business Lines consulted | All |
| Date: | Version: | |
| 10 April 2012 | Original statement | |
| 31 August 2012 | Updated statement | |
| You are here | 11 October 2013 | Updated statement |
| 15 July 2016 | Updated statement | |
| 24 April 2024 | Updated statement | |
| 12 December 2024 | Updated statement |