Damages & compensation

Not to state the obvious, but sometimes (just sometimes) the Tax Office gets things wrong. It doesn't happen very often, but when it does, a compensatory damages payment could be in order.

Claims for financial compensation made for tax dealings that have gone awry tend to be framed by the Tax Office in terms of putting taxpayers 'back into the financial position they would have been in' had the error not occurred, rather than as recompense for a wrong-doing. So if you believe you're on the wrong end of the stick, and that the Tax Office has not only done the wrong thing but you have suffered financially from it, getting compensation is a very real option.

The Tax Office embraces its duty to administer tax legislation and policy 'responsibly and reasonably', it says, and to give 'accurate, appropriate and unambiguous' advice. Acting unreasonably, or providing incorrect advice and information that leads to financial loss, will open the Tax Office to claims of compensation for that loss.

Being found liable at law for its actions (for example as the result of a court case) can result when the Tax Office administers the tax laws directly or even through the administration of these laws indirectly, as may occur through contracting  a service provider. Legal liability can also be found when dealing with people, as with discrimination or breach of privacy.

Compensation claims in these cases are based on the Tax Office having been negligent in its duties. But even if the question of performance of duty is not so cut-and-dried, and there is no clear liability, the Tax Office says it will still consider providing compensation for loss if the claim can be shown to place the Tax Office with a 'potential' legal liability.

If you believe you have a case, you will need to apply for compensation on the form here, attach copies of any relevant documents and evidence, and send it in to the address at the end of the form.

The Tax Office says it aims to acknowledge receipt of your compensation claim in writing within three business days from receiving it. Some claims are handled by the Assistant Treasurer, and some may require more information than is first supplied. The Tax Office has committed to let claimants know of these situations within seven working days.

If you want to lodge an objection with the Tax Office, you can use the objection form that is accessible here.

Last reviewed 26/07/2012

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