ATO Practice Statement Law Administration
PS LA 2004/10
| SUBJECT: | Tax laws claimed to be invalid |
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| PURPOSE: |
How to deal with correspondence from taxpayers who claim that they will not comply with the tax laws because:
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This version is no longer current.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 law administration practice statement is issued under the authority of the Commissioner and must be read in conjunction with Law Administration Practice Statement PS LA 1998/1. ATO personnel, including non ongoing staff and relevant contractors, must comply with this law administration practice statement, unless doing so creates unintended consequences or is considered incorrect. Where this occurs, ATO personnel must follow their business line's escalation process. |
BACKGROUND
1. The ATO regularly receives correspondence from taxpayers arguing they are exempt from fulfilling their taxation obligations because:
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- either the entire taxation system is invalid, or
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- the tax system does not apply to them for a particular reason.
2. The correspondence may take a variety of forms, including requests for proof that laws are valid, requests for information, personal enquiries and objection letters.
3. This type of correspondence will often include:
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- complex constitutional arguments based on the notion that Australia's entire legal and political systems are invalid, thus all laws are invalid
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- arguments that the particular individual's legal status is such that they are not subject to Australian laws
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- form letters and documents. Often several letters are received bringing up identical arguments. Frequently these letters are documents purporting to be legal notices, which do not appear to be valid. Such documents may demand that tax officers to produce documents, recognise a particular fact, make payments or perform other tasks.
4. On occasion, these letters will threaten legal action against the ATO, or against particular ATO personnel.
STATEMENT
5. Any correspondence of this type which is not part of an on going matter, or where there is any doubt about the validity of the taxpayers' arguments, should be escalated in accordance with the published procedures Correspondence - action constitutional correspondence.
6. In accordance with the Attorney General's Legal Services Directions, the ATO may provide legal assistance to defend ATO personnel who have acted reasonably and responsibly in carrying out their duties from a claim brought by a person and based on one of these unsupportable arguments.
7. It is important for ATO personnel to note the following.
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- It is not the function of ATO personnel to enter into debate or give advice about Constitutional issues or other issues not related to the administration of the taxation system.
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- Submissions raising arguments similar to the types raised in correspondence of this type have already been dismissed as being unarguable by various courts including the High Court of Australia.
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- The correspondences, and any responses, do not alter any obligations the authors may have under the laws administered by the Commissioner, and refusal to comply with these obligations may result in prosecution and the imposition of penalties and interest.
8. Given that many claims of this type have been rejected by the Courts, it is not appropriate for ATO personnel to spend time and resources producing detailed responses to these claims.
9. When ATO personnel are responding to correspondence of this type, generally, the appropriate response will be a short letter of rejection. This letter will make it clear that the ATO does not accept the views put forward by the author and that the correspondence does not alter any legal obligations the author has under any of the laws administered by the Commissioner.
10. This practice statement replaces Law Administration Practice Statement PS LA 1999/3 which is withdrawn from the date of effect of this practice statement.
Amendment history
| Date of amendment | Part | Comment |
|---|---|---|
| 19 October 2012 | Paragraph 5 | Corrected 'changes' to 'correspondence'. |
| Original paragraph 6 | Deleted as it is no longer current | |
| Paragraphs 3 and 6 | Minor grammatical corrections | |
| 9 November 2010 | Contact details & general style update | Updated contact officer & changed reference to Tax Office to ATO. |
| 21 October 2009 | Preamble | Updated to reflect current wording |
| Paragraph 5 & 6 | Replace referral point with linked escalation procedures | |
| Original paragraph 11 | Deleted as it is no longer required | |
| 8 January 2009 | Paragraph 11 | Alternate contact updated |
| 5 March 2006 | Paragraph 11 | Referral points updated |
| 15 November 2004 | Paragraphs 5 and 11 | Referral points updated |
Date of Issue: 6 September 2004
Date of Effect: 6 September 2004
File NO 99/6282-4; NO 98/11481-6
Related Practice Statements:
Law Administration Practice Statement PS LA 1999/3 (withdrawn)
Other References:
Correspondence - action constitutional correspondence
Subject References:
constitution
invalid law
taxation laws
| Contact email | OperationalPolicyAssuranceandLawWorkManagement@ato.gov.au |
| Section | Operational Policy, Assurance and Law |
| Date: | Version: | ||
| 8 January 2009 | Updated statement | ||
| 21 October 2009 | Updated statement | ||
| 9 November 2010 | Updated statement | ||
| 5 January 2012 | Updated statement | ||
| You are here | 19 October 2012 | Updated statement | |
| 11 August 2022 | Updated statement | ||
| 3 October 2024 | Updated statement | ||
| This practice statement was originally published on 6 September 2004. Versions published from 8 January 2009 are available electronically - refer to the online version of the practice statement. Versions published prior to this date are not available electronically. If needed, these can be requested by emailing TCNLawPublishingandPolicy@ato.gov.au. | |||