HG Alert: Freedom of Information Reform: Your key to accessing the ATO’s secret files - 30 Nov 2010

Significant changes to the Freedom of Information Act 1982 mean that you now have better access to information that the ATO holds about you and your business tax affairs.

Along with the establishment of the Office of the Australian Information Commissioner, these new laws give those involved in any sort of tax dispute with the ATO a helping hand to favourably resolve the dispute, as the laws make it harder for the ATO to keep information secret.

How have the freedom of information laws changed?

The Freedom of Information Amendment (Reform) Act 2010 introduces a new public interest test for disclosure, designed to encourage a "proactive publication culture". This means that freedom of information rules may no longer be so easily used to restrict the publication of internal working documents prepared by government officials.

Although this test is new, and we are yet to see how the ATO applies it in practice, we believe that the new laws are a positive change from a taxpayer's perspective. The new public interest test clearly states the circumstances in which disclosure will be favoured, and removes some of the justifications that have been used in the past to restrict the release of documents.

The information that may now be more easily available includes internal ATO workings on your tax affairs, such as memos that discuss alternative views of whether you may have a tax liability, or the general merits of your case. The ATO has traditionally been very protective of this information.

Why would I want to make a freedom of information request?

There are two main reasons why you might want to make a targeted freedom of information request:

  1. To reveal information that helps to quickly resolve a tax dispute; or
  2. To hold the ATO officers handling your case to account, as they are put on notice that they will have the merits of their decisions scrutinised by a taxpayer and their advisers. In practical terms, it is an effective way (and sometimes the only practical and cost-effective way) of holding ATO officers to account.

What needs to go in a freedom of information request?

Despite reforms to the law, there are still exemptions that allow the ATO to reject a poorly thought-out freedom of information request. It is still necessary to make sure that potentially tricky issues (such as whether you have legal standing to access the information you want) are dealt with in your request.

You need to make sure that your request asks the right questions, so that you get useful information back. When coupled with recent changes in the law, a properly considered freedom of information request is an efficient way to access information if you:

  • are in a dispute with the ATO;
  • are concerned that a tax position you have taken in the past could give rise to a tax bill, along with interest and penalties; or
  • just want to know what information has been taken into account in making decisions about your tax affairs.

For more information on how a freedom of information request may assist in resolving your tax dispute, please contact HopgoodGanim's Taxation and Revenue practice.