Commonwealth Consolidated Acts

TAX AND SUPERANNUATION LAWS AMENDMENT (2014 MEASURES NO. 7) ACT 2015 - SCHEDULE 2

Part   1 -- Main amendments

Inspector - General of Taxation Act 2003

1   Paragraph 3(a)

Omit "the tax laws for the benefit of all taxpayers", substitute "taxation laws for the benefit of all taxpayers, tax practitioners and other entities".

2   Paragraph 3(b)

Omit "the tax laws", substitute "taxation laws".

3   Paragraph 3(c)

Repeal the paragraph, substitute:

  (c)   investigate complaints by taxpayers, tax practitioners or other entities about the administration of taxation laws; and

  (d)   investigate administrative action taken under taxation laws, including systemic issues, that affect taxpayers, tax practitioners or other entities.

4   Section   4

Insert:

"ATO official" means:

  (a)   the Commissioner; or

  (b)   a Second Commissioner of Taxation; or

  (c)   a Deputy Commissioner of Taxation; or

  (d)   a person engaged under the Public Service Act 1999 , or an employee or officer of an authority of the Commonwealth, performing duties in the Australian Taxation Office; or

  (e)   a person engaged on behalf of the Commonwealth by another ATO official to provide services related to the administration of taxation laws; or

  (f)   a person who:

  (i)   is a member of a body established for the sole purpose of assisting the Commissioner in the administration of an aspect of taxation laws; and

  (ii)   receives, or is entitled to receive, remuneration (but not merely allowances) from the Commonwealth in respect of his or her membership of the body.

"Commissioner" means the Commissioner of Taxation.

"entity" has the same meaning as in the Income Tax Assessment Act 1997 .

"investigation into a complaint" means an investigation under paragraph   7(1)(a).

"investigation into a systemic issue" means an investigation under paragraph   7(1)(c) or (d).

5   Section   4 (definition of review )

Repeal the definition.

6   Section   4

Insert:

"tax administration action" means action that the Inspector - General can investigate under paragraph   7(1)(a) or (b).

"taxation law" has the same meaning as in the Income Tax Assessment Act 1997 .

"tax file number" has the same meaning as in the Income Tax Assessment Act 1997 .

7   Section   4 (definition of tax law )

Repeal the definition.

8   Section   4 (definition of tax official )

Repeal the definition, substitute:

"tax official" means:

  (a)   an ATO official; or

  (b)   a Board member of the Tax Practitioners Board; or

  (c)   an APS employee assisting the Tax Practitioners Board as described in section   60 - 80 of the Tax Agent Services Act 2009 ; or

  (d)   a person engaged on behalf of the Commonwealth by another tax official (other than an ATO official) to provide services related to the administration of taxation laws; or

  (e)   a person who:

  (i)   is a member of a body established for the sole purpose of assisting the Tax Practitioners Board in the administration of an aspect of taxation laws; and

  (ii)   receives, or is entitled to receive, remuneration (but not merely allowances) from the Commonwealth in respect of his or her membership of the body.

9   Section   4 (definition of taxpayer )

Omit "tax law", substitute "taxation law".

10   Section   4

Insert:

"Tax Practitioners Board" means the Tax Practitioners Board established by section   60 - 5 of the Tax Agent Services Act 2009 .

11   Divisions   2, 3 and 4 of Part   2

Repeal the Divisions, substitute:

Division   2 -- Functions of the Inspector - General

7   Functions of the Inspector - General

  (1)   The functions of the Inspector - General are as follows:

  (a)   to investigate action affecting a particular entity that:

  (i)   is taken by a tax official; and

  (ii)   relates to administrative matters under a taxation law; and

  (iii)   is the subject of a complaint by that entity to the Inspector - General;

  (b)   to investigate other action that:

  (i)   is taken by a tax official; and

  (ii)   relates to administrative matters under a taxation law;

  (c)   to investigate systems established by the Australian Taxation Office, or Tax Practitioners Board, to administer taxation laws, including systems for dealing or communicating:

  (i)   with the public generally; or

  (ii)   with particular people or organisations;

    in relation to administrative matters under those laws;

  (d)   to investigate systems established by taxation laws, but only to the extent that the systems deal with administrative matters;

  (e)   to investigate action that is the subject of a part of a complaint:

  (i)   transferred to the Inspector - General by the Ombudsman under paragraph   6D(4)(b) of the Ombudsman Act 1976 ; or

  (ii)   that the Ombudsman advises, under paragraph   10(1)(b) of this Act, does not need to be transferred under subsection   10(1) of this Act;

  (f)   to report on those investigations.

Note:   Paragraphs   ( a) and (b) can cover action under a taxation law, and action relating to action under a taxation law.

Example:   A taxpayer seeks compensation under an administrative scheme because of action by a tax official during the course of an audit that caused the taxpayer detriment. The Inspector - General can investigate the action that caused the detriment, and any action by a tax official under the scheme.

  (2)   However, these functions do not include investigating:

  (a)   rules imposing or creating an obligation to pay an amount under a taxation law; and

  (b)   rules dealing with the quantification of such an amount.

8   Conducting investigations on Inspector - General's own initiative

  (1)   The Inspector - General may conduct an investigation under paragraph   7(1)(b), (c) or (d) on his or her own initiative.

Note:   For example, the Inspector - General may conduct an investigation into a systemic issue that has been drawn to his or her attention by taxpayers, tax practitioners, the Auditor - General or the Ombudsman.

  (2)   The Inspector - General must conduct an investigation under paragraph   7(1)(c) or (d) if so directed by the Minister.

  (3)   The Inspector - General may be requested to conduct an investigation under paragraph   7(1)(c) or (d) by:

  (a)   the Minister; or

  (b)   the Commissioner or the Tax Practitioners Board; or

  (c)   a resolution of either House, or of both Houses, of the Parliament; or

  (d)   a resolution of a Committee of either House, or of both Houses, of the Parliament.

However, the Inspector - General is not required to comply with the request.

9   Discretion not to investigate certain complaints

    The Inspector - General may, in his or her discretion:

  (a)   decide not to conduct an investigation into a complaint; or

  (b)   if he or she has started such an investigation--decide not to continue investigating the action complained about;

if the Inspector - General is of the opinion that:

  (c)   the complaint is frivolous or vexatious or was not made in good faith; or

  (d)   the complainant does not have a sufficient interest in the subject matter of the complaint; or

  (e)   an investigation, or further investigation, of the action is not warranted having regard to all the circumstances; or

  (f)   the complainant has not yet raised the complaint with the Commissioner or the Tax Practitioners Board (as applicable); or

  (g)   the action came to the complainant's knowledge more than 12 months before the complaint was made; or

  (h)   the complainant has not exercised a right to cause the action to which the complaint relates to be reviewed by a court or by a tribunal constituted by or under a law of the Commonwealth.

10   Transferring complaints to the Ombudsman

  (1)   The Inspector - General must transfer the following to the Ombudsman:

  (a)   a complaint made to the Inspector - General that is wholly about action other than tax administration action, unless the Ombudsman advises otherwise;

  (b)   if part of a complaint made to the Inspector - General is not about tax administration action--that part of the complaint, unless the Ombudsman advises otherwise.

  (2)   For a complaint made to the Inspector - General that is only partly about tax administration action, the Inspector - General:

  (a)   must consult the Ombudsman about the complaint or about complaints of that kind; and

  (b)   may transfer to the Ombudsman the part of the complaint that is about tax administration action if the Inspector - General is satisfied that the whole complaint could be more appropriately or effectively dealt with by the Ombudsman.

  (3)   The Inspector - General must, for each complaint (or part of a complaint) transferred to the Ombudsman:

  (a)   notify the complainant in writing of that transfer; and

  (b)   give the Ombudsman any related information or documents (other than tax file numbers) that are:

  (i)   in the Inspector - General's possession; or

  (ii)   under the Inspector - General's control.

  (4)   For the purposes of the Ombudsman Act 1976 (other than subsection   6D(2), (3) or (4) of that Act), a complaint (or part of a complaint) transferred under this section is taken to be a complaint made to the Ombudsman under that Act.

Note:   A similar provision for transferring to the Inspector - General complaints made to the Ombudsman is contained in section   6D of the Ombudsman Act 1976 . Subsection   6D(6) of that Act deems transferred complaints to be complaints made to the Inspector - General under this Act.

  (5)   This section does not apply to a complaint if:

  (a)   the Inspector - General transfers the complaint under subsections   6(9) and (10), or section   6C, of the Ombudsman Act 1976 ; or

  (b)   subsection   6(17) of that Act applies in relation to the complaint.

(Each of the above provisions of the Ombudsman Act 1976 is that provision as it applies because of section   15 of this Act).

Division   3 -- Powers and duties of the Inspector - General

15   Certain provisions of the Ombudsman Act 1976 apply

    Each of the following provisions of the Ombudsman Act 1976 also applies in relation to the Inspector - General with the modifications set out in the following table:

  (a)   subsections   3(1), to the extent that it provides for the definitions of Agency Head , authorized person , Commonwealth service provider , disclosable conduct and law enforcement agency ;

  (b)   subsections   3(2) to (6) and subsection   3(7);

  (c)   sections   3BA, 3C and 3D;

  (d)   subsections   5(2), (3) and (3A);

  (e)   section   5A;

  (f)   subsections   6(5), (9) to (11) and (16) to (19);

  (g)   sections   6C, 7 and 7A;

  (h)   section   8, other than paragraphs   ( 7A)(b) and (10)(ba) to (d) and subsections   ( 8), (9), (10B), (10C) and (12);

  (i)   sections   9 to 19, other than subsections   16(4) and (5);

  (j)   sections   35AA to 37.

Note:   The above references in provisions of the Ombudsman Act 1976 are described in substance, rather than form. For example, table item   2 will apply to the phrase "an investigation under this Act" wherever it appears in any of those provisions.

16   References to a Department or a prescribed authority

  (1)   For the purposes of table item   4 in section   15, if the relevant investigation relates to action taken by an ATO official or to the Australian Taxation Office, the reference described in that item applies as if it were a reference to the Commissioner, or the Australian Taxation Office, (as the context requires).

  (2)   For other investigations under this Act, the reference described in table item   4 in section   15 applies as if it were a reference to the Tax Practitioners Board.

17   Further modifications to how some of those provisions apply

  (1)   Despite subsection   8(2) of the Ombudsman Act 1976 (as it applies because of section   15 of this Act), an investigation into a systemic issue need not be conducted in private.

  (2)   Despite paragraph   9(1)(a) of the Ombudsman Act 1976 (as it applies because of section   15 of this Act), a person may furnish information under that paragraph in a way otherwise than by writing signed by the person.

  (3)   Despite section   15, 16 or 17 of the Ombudsman Act 1976 (as it applies because of section   15 of this Act), the Inspector - General must not recommend changes to taxation laws in a report under that section.

Note:   The Inspector - General can include such recommendations in reports under section   18.

  (4)   Despite subsection   36(1) of the Ombudsman Act 1976 (as it applies because of section   15 of this Act), the penalty set out at the foot of that subsection applies as if it were imprisonment for 6 months in the case of a refusal or failure relating to an investigation into a systemic issue.

18   Reports recommending improvements to taxation laws

  (1)   After completing an investigation under this Act, the Inspector - General may make a written report to the Minister:

  (a)   identifying a taxation law under which the action being investigated was taken; and

  (b)   setting out any recommendations for how that taxation law might be improved; and

  (c)   setting out the reasons for those recommendations.

The report may set out other matters.

  (2)   The Minister must cause a copy of the report to be made publicly available before the end of the 25th sitting day of the House of Representatives after the day the Minister receives the report.

12   Part   4 (heading)

Repeal the heading, substitute:

Part   4 -- Information management

Division   1 -- Secrecy

13   Subsection   37(1) ( paragraph   ( b) of the definition of protected document )

Omit "a taxpayer's", substitute "an entity's".

14   Subsection   37(1) ( paragraph   ( b) of the definition of protected information )

Omit "a taxpayer's", substitute "an entity's".

15   After section   37

Insert:

Division   2 -- Powers relating to tax file numbers

37B   Requesting a person's tax file number

  (1)   The Inspector - General may request, but not require, a person making a complaint covered by paragraph   7(1)(a) to quote the person's tax file number to the Inspector - General.

  (2)   The Inspector - General may provide the person's tax file number to the Commissioner for the purposes of an investigation by the Inspector - General into the complaint.

37C   Investigations under this Act

    The Commissioner may quote a person's tax file number to the Inspector - General for the purposes of an investigation by the Inspector - General into a complaint by the person that is covered by paragraph   7(1)(a).

16   Before section   38

Insert:

Part   5 -- Other matters

17   Section   38

Omit "a review", substitute "an investigation".

18   Paragraph 38(c)

Omit "Commissioner of Taxation", substitute "Commissioner".

19   Subparagraph 39(1)(e)(i)

Omit "section   14 or 15", substitute "section   9 of the Ombudsman Act 1976 (as it applies because of section   15 of this Act)".

20   Subparagraphs   39(1)(e)(ii), (iii) and (iv)

Omit "section   14 or 15", substitute "that section".

21   Subparagraphs   39(1)(e)(v) and (vi)

Repeal the subparagraphs, substitute:

  (v)   is the subject of a report under this Act, or the Ombudsman Act 1976 (as it applies because of section   15 of this Act), that relates to an investigation under this Act.

22   Subparagraph 39(2)(c)(i)

Omit "section   14 or 15", substitute "section   9 of the Ombudsman Act 1976 (as it applies because of section   15 of this Act)".

23   Subparagraphs   39(2)(c)(ii), (iii) and (iv)

Omit "section   14 or 15", substitute "that section".

24   Subparagraphs   39(2)(c)(v) and (vi)

Repeal the subparagraphs, substitute:

  (v)   is the subject of a report under this Act, or the Ombudsman Act 1976 (as it applies because of section   15 of this Act), that relates to an investigation under this Act.

25   Subsection   40(2)

After "this Act", insert "or the Ombudsman Act 1976 (as it applies because of section   15 of this Act)".

26   Section   41

Before "The", insert "(1)".

27   Section   41 (note)

Repeal the note.

28   At the end of section   41

Add:

  (2)   The report must also include:

  (a)   the number of complaints received by the Inspector - General under this Act during the period; and

  (b)   the number of investigations under paragraph   7(1)(a) or (b):

  (i)   started during the period; and

  (ii)   completed during the period; and

  (c)   the number of investigations into systemic issues:

  (i)   started during that period; and

  (ii)   completed during that period; and

  (d)   the number of times when the Inspector - General has made a requirement of a person under section   9 of the Ombudsman Act 1976 (as it applies because of section   15 of this Act) during the period; and

  (e)   details of the circumstances in which each of those requirements under section   9 of that Act was made.

29   Section   42

Repeal the section, substitute:

42   Delegation of certain powers by the Inspector - General

  (1)   The Inspector - General may, in writing, delegate any of the following powers to a member of the Inspector - General's staff:

  (a)   the Inspector - General's powers under the Ombudsman Act 1976 (as it applies because of section   15 of this Act), except for the Inspector - General's powers under sections   15 to 19 of that Act;

  (b)   the Inspector - General's powers under subsections   36(3) and (4) of this Act to make arrangements and engage consultants (including determining the terms and conditions of their engagement).

  (2)   In exercising powers under a delegation, a delegate must comply with any written directions of the Inspector - General.

30   Subsection   43(2)

Omit "section   13, 14, 15 or 25", substitute "the Ombudsman Act 1976 (as it applies because of section   15 of this Act)".

31   Section   44

Repeal the section.

32   Schedule   1

Repeal the Schedule.

Ombudsman Act 1976

33   Subsection   3(1)

Insert:

"taxation law" has the same meaning as in the Income Tax Assessment Act 1997 .

34   Subsection   4(3)

Repeal the subsection.

35   After section   6C

Insert:

6D   Tax administration matters and transfer of complaints to Inspector - General of Taxation

Ombudsman not to investigate action relating to tax administration

  (1)   The Ombudsman must not investigate action that the Inspector - General of Taxation can investigate under paragraph   7(1)(a) or (b) of the Inspector - General of Taxation Act 2003 ( tax administration action ).

Exception--transferred complaints

  (2)   However, the Ombudsman may investigate tax administration action that:

  (a)   is the subject of a part of a complaint transferred to the Ombudsman under paragraph   10(2)(b) of the Inspector - General of Taxation Act 2003 ; or

  (b)   is the subject of a part of a complaint that the Inspector - General of Taxation advises, under paragraph   ( 3)(b) of this section, does not need to be transferred under subsection   ( 3); or

  (c)   is also action relating to a matter of administration under:

  (i)   the Public Interest Disclosure Act 2013 ; or

  (ii)   the Freedom of Information Act 1982 ; or

  (iii)   another Act (other than a taxation law) prescribed by regulations made for the purposes of this paragraph.

Note:   Subsection   ( 1) does not apply to any part of a complaint that is not in respect of tax administration action.

Transferring complaints to the Inspector - General of Taxation

  (3)   The Ombudsman must transfer the following to the Inspector - General of Taxation:

  (a)   a complaint made to the Ombudsman that is wholly in respect of tax administration action;

  (b)   if part of a complaint made to the Ombudsman is in respect of tax administration action--that part of the complaint, unless the Inspector - General advises otherwise.

  (4)   For a complaint made to the Ombudsman that is only partly in respect of tax administration action, the Ombudsman:

  (a)   must consult the Inspector - General of Taxation about the complaint or about complaints of that kind; and

  (b)   may transfer to the Inspector - General the part of the complaint that is not in respect of tax administration action if the Ombudsman is satisfied that the whole complaint could be more appropriately or effectively dealt with by the Inspector - General of Taxation.

  (5)   The Ombudsman must, for each complaint (or part of a complaint) transferred to the Inspector - General of Taxation:

  (a)   notify the complainant in writing of that transfer; and

  (b)   give the Inspector - General of Taxation any related information or documents that are:

  (i)   in the Ombudsman's possession; or

  (ii)   under the Ombudsman's control.

  (6)   For the purposes of the Inspector - General of Taxation Act 2003 (other than subsection   10(1) or (2) of that Act), a complaint (or part of a complaint) transferred under this section is taken to be a complaint made to the Inspector - General of Taxation under that Act.

Note:   A similar provision for transferring to the Ombudsman complaints made to the Inspector - General is contained in section   10 of the Inspector - General of Taxation Act 2003 . Subsection   10(4) of that Act deems transferred complaints to be complaints made to the Ombudsman under this Act.

Part   2 -- Other amendments

Income Tax Assessment Act 1936

36   At the end of section   202

Add:

  ; and (r)   to facilitate investigations under the Inspector - General of Taxation Act 2003 (and provisions of the Ombudsman Act 1976 to the extent that they are applied by the Inspector - General of Taxation Act 2003 ).

Tax Agent Services Act 2009

37   Before subsection   70 - 40(3)

Insert:

Disclosures to the Commissioner

38   After subsection   70 - 40(3A)

Insert:

Disclosures to the Inspector - General of Taxation

  (3B)   Subsection   70 - 35(1) does not apply if the record or disclosure is to the Inspector - General of Taxation and is for the purpose of investigating or reporting under, or otherwise administering:

  (a)   the Inspector - General of Taxation Act 2003 ; or

  (b)   provisions of the Ombudsman Act 1976 , to the extent that they are applied by the Inspector - General of Taxation Act 2003 .

Note:   A defendant bears an evidential burden in relation to the matters in subsection   ( 3B): see subsection   13.3(3) of the Criminal Code .

Taxation Administration Act 1953

39   Paragraph 8WA(1AA)(b)

Omit "or (m)", substitute ", (m) or (r)".

40   Paragraph 8WB(1A)(a)

Omit "or (q)", substitute ", (q) or (r)".

41   Paragraph 8WB(1A)(b)

Omit "or (q)", substitute ", (q) or (r)".

42   Section   355 - 1 in Schedule   1 (note)

Omit:

• section   15 of the Inspector - General of Taxation Act 2003 ;

43   Subsection   355 - 65(5) in Schedule   1 (at the end of the table)

Add:

Part   3 -- Application and transitional provisions

44   Application of amendments

(1)   The amendments made by this Schedule (other than item   43) apply in relation to:

  (a)   complaints made; or

  (b)   investigations or reviews conducted on an entity's own initiative that start;

at or after the commencement of this Schedule.

(2)   The amendment made by item   43 applies in relation to records and disclosures of information made on or after the commencement of that item (regardless of when the information was acquired).

45   Transitional--expenses for attending before Inspector - General

(1)   This item applies to regulations under the Ombudsman Act 1976 to the extent that those regulations provide for the payment of fees and allowances to persons for their expenses for attending, or appearing as a witness, before the Ombudsman or the Ombudsman's delegate.

(2)   At and after the commencement of this Schedule, those regulations also apply as if:

  (a)   they were regulations under the Inspector - General of Taxation Act 2003 ; and

  (b)   references in those regulations to the Ombudsman were references to the Inspector - General.

(3)   Subitem   ( 2) does not prevent the Governor - General from making regulations under the Inspector - General of Taxation Act 2003 providing for payments for attending before the Inspector - General or a member of the Inspector - General's staff.

46   Transitional--investigating complaints similar to those made before commencement

The Inspector - General may, in his or her discretion:

  (a)   decide not to conduct an investigation into a complaint made at or after the commencement of this Schedule about particular action; or

  (b)   if he or she has started such an investigation--decide not to continue investigating that action;

if the Inspector - General is of the opinion that, before that commencement, the complainant had already complained about that action to the Ombudsman.