I recently presented on Tax Advocacy: Writing to Win, which discussed my tips, traps and examples for preparing more effective written advocacy including:
- writing style lessons from S.D. Stark and G.T. Pagone and others;
- the importance of addressing legislative authority, administrative practice and tax policy and the differences between assessments, determinations and exercise of discretion;
- preparing objections;
- preparing penalty and GIC & SIC remission requests; and
- preparing settlement offers and settlement deeds.
With all good written advocacy, the objective is to ensure the writing is expressed clearly, concisely and persuasively. My golden rules are:
- Understand, address and managing the bureaucratic structures, systems and tendencies and administration practices of the ATO.
- Applying a consistent methodology within the tax advocacy team will improve efficiencies and quality of written advocacy.
- Write for the benefit of the client, the intended and successive reader and within legislative and procedural constraints.
- Effective tax advocacy should address legislative power, judicial interpretation, ATO administrative practice and tax policy to resolve ‘disputed and disputable issues’.
- Identify the relevant legislative power to ensure there is a disputable issue and the correct procedure is adopted and expressly engage that power.
- Extra care is required in communicating with the ATO, the Courts and the Tribunals, because penalties for material misstatements and omissions are visited upon the taxpayer and the adviser.
- Advisers should be reluctant to make the declaration required by the ATO forms and, as a matter of practice, should use the taxpayer forms for signing by the taxpayer.
- Select and include only the facts and documents that relate directly to the legal reasons (i.e. the ‘taxable facts’). Additional facts or documents are as likely to lose as win the case.
- Use the CRAC method - C)onclusion, (R)ule, (A)nalyisis, (C)ases - of technical drafting, because the method directs the reader by stating the conclusion first, avoids lengthy quotations and emphasises the taxpayer's position rather than the ATO's position.
- Use the method of drafting by formulating arguments by interweaving the statutory words with relevant facts in respect of each element of the claim and prepare specific rather than exhaustive and compendious claims.
- An objection is the first step in the litigation process as it defines and potentially confines any legal proceedings. The quality and style of the objection should reflect that it is a fundamental part of legal proceedings.
- The objective of a penalty remission request is to establish the taxable facts, the appropriate base penalty amount, the entitlement to the safe harbour exemption or a reduction for voluntary disclosure and to a discretionary remission by reference to the ATO’s administrative practice.
- The objective of a GIC and SIC remission request is to establish the taxable facts and the entitlement to a total or partial remission by reference to the ATO’s pre and post assessment administrative practice.
- It is essential for advisers to structure any settlement in accordance with the Settlement Code so the ATO is amenable to the settlement.
The paper provided simple examples of objections and penalty and GIC remission requests.
An example ground and reason for objection could be drafted as:
The Assessment is excessive and not in accordance with law (or both) because:
1. The Assessment was unauthorised and is invalid and of no effect because [the Taxpayer had not authorised the lodgment of the income tax return by the Tax Agent] and the Assessment should be set aside:
Reasons
(a) [Submissions on PSLA 2008/11: fraud and unauthorised returns].
(b) [Submissions on Kakavas v FCT [2011] AATA 48].
Effective written advocacy is arguably an art and a subjective preference for style.
Applying a consistent methodology within the tax advocacy team will improve efficiencies and quality of written advocacy.
More effective written advocacy should improve the persuasiveness of the client’s case and the prospects of achieving the desired result.