When to Add a Tax Lawyer to the Team: A Practical Guide for Accountants and Solicitors
When the ATO Requests Documents or Interviews
When the Outcome Depends on Contested Facts
When Significant Penalties Are Involved
When an Objection Could Become Litigation
When Independent Advice Benefits Everyone
How I Work with Referring Accountants and Solicitors
When to Add a Tax Lawyer to the Team: A Practical Guide for Accountants and Solicitors Facing an ATO Matter
Most serious taxation disputes begin in an accountant’s office, not a courtroom.
Accountants often possess the deepest understanding of their client’s affairs, financial records and commercial history. Likewise, solicitors frequently have longstanding relationships with clients and understand the broader legal and commercial context.
The question is not when those professionals should step aside.
The question is when a client’s position can be strengthened by adding a specialist tax lawyer to the existing advisory team.
Early involvement can be particularly valuable where an ATO review or audit begins to involve legal professional privilege, disputed facts, penalties, objections or potential litigation.
When the ATO Requests Documents or Interviews
The Australian Taxation Office has extensive information-gathering powers. Before documents are produced or formal interviews take place, consideration should be given to legal professional privilege and the ATO’s separate approach to professional accounting advisers’ papers.
Privilege issues are often best addressed early rather than after documents have already been produced.
Careful management at the outset can avoid unnecessary disputes and protect a client’s position.
For further information, see the Australian Taxation Office:
https://www.ato.gov.au
When the Outcome Depends on Contested Facts
Many taxation disputes ultimately turn on facts rather than accounting calculations.
Examples include:
- Tax residency and intention.
- Family trust distributions.
- Characterisation of payments.
- Beneficial ownership.
- Division 7A issues.
- International structures.
- Whether funds are loans, dividends or capital.
- Permanent establishment arrangements.
Accountants usually possess much of the financial and factual knowledge. A specialist tax lawyer can assist in identifying what evidence is required and how the case should be presented.
You may also wish to read:
ATO Tax Disputes Lawyer Australia
ATO Tax Disputes Lawyer Australia: When to Add Tax Counsel to the Client’s Advisory Team
International Tax Lawyer
https://chrisgarlickbarrister.com.au/international-tax-lawyer/
When Significant Penalties Are Involved
Matters involving allegations of:
- Recklessness;
- Intentional disregard;
- Evasion;
- Sham arrangements;
- False or misleading statements; or
- Tax avoidance,
can have consequences extending well beyond the immediate audit.
The language used in responses and submissions may later become important in objections, tribunal proceedings or litigation.
At this stage, many advisers consider it prudent to involve a specialist tax lawyer.
When an Objection Could Become Litigation
An objection should not simply be treated as another piece of correspondence.
It may eventually become the foundation of proceedings before the Administrative Review Tribunal or the Federal Court of Australia.
Accordingly, legal issues, evidence and grounds should be considered with possible litigation in mind.
Further information is available from:
Administrative Review Tribunal
https://www.art.gov.au
Federal Court of Australia
https://www.fedcourt.gov.au
When Independent Advice Benefits Everyone
Sometimes accountants and solicitors have reached a considered position but seek an independent specialist opinion.
Examples include:
- Division 7A.
- Tax residency.
- Family trusts.
- Capital gains tax.
- International taxation.
- Permanent establishment issues.
- Business sales and restructures.
- Withholding tax.
- Private rulings.
Independent advice can provide additional confidence and assist both the adviser and the client.
How I Work with Referring Accountants and Solicitors
My role is to support, not replace, the professional relationship that already exists.
I accept discrete instructions including:
- Preliminary conferences;
- Written opinions;
- Review of ATO position papers;
- Objection strategy;
- Evidentiary assessment;
- Settlement advice; and
- Representation.
Subject to client instructions and professional obligations, referring accountants and solicitors remain involved and informed throughout the engagement.
Preserving the Existing Professional Relationship
Clients value trusted advisers.
I recognise the importance of preserving those relationships and understand that accountants and solicitors often remain central to the client’s affairs.
My role is to provide specialist taxation expertise where required and to complement, rather than replace, the work already being undertaken.
Many matters involve collaboration between accountants, solicitors and specialist tax lawyers to achieve the best outcome for the client.
Need Specialist Tax Advice?
Chris Garlick is a specialist tax lawyer practising exclusively in taxation and international taxation matters.
He assists clients and professional advisers throughout Australia with:
- ATO audits and reviews;
- Tax disputes and objections;
- Tax litigation;
- Capital gains tax matters;
- Division 7A issues;
- Family trust taxation;
- Tax residency advice;
- International taxation;
- Business restructures; and
- Cross-border taxation matters.
Related Articles
ATO Tax Disputes Lawyer Australia
ATO Tax Disputes Lawyer Australia: When to Add Tax Counsel to the Client’s Advisory Team
International Tax Lawyer
https://chrisgarlickbarrister.com.au/international-tax-lawyer/
Permanent Establishment and PE Nexus Rules
Disclaimer: This article contains general information only and does not constitute legal advice. Specific advice should be obtained having regard to the circumstances of each matter.