Tax disputes system design

Seminal dispute resolution theorists Ury, Brett and Goldberg said that disputes are inevitable when people with different interests deal with each other regularly. Echoing this, the current Australian Commissioner of Taxation, has recently said that in relation to the application of tax law to complex facts, some level of disputation is inevitable. This paper considers the effectiveness of tax dispute resolution processes from a dispute systems design theoretical perspective. Specifically, this paper is divided into three parts. By way of background and in order to provide a context within which to analyze and evaluate, the first part summarizes the goals and theoretical framework for dispute systems design, including the fundamental principles for best practice in dispute systems design. The second part outlines the range of current processes available for resolving tax disputes between the Australian Taxation Office (ATO) as one party, and a taxpayer as the other party. The third part performs an evaluation of those processes against the fundamental dispute systems design principles, and concludes that the ATO dispute resolution model possesses much of the best practice principles, although there are some deficiencies