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Pre-filling of tax returns in the 21st Century

Robin Woellner, James Cook University


As discussed above, with the impact of increasingly computerised record-keeping and the ongoing development and refinement of increasingly sophisticated computerisation and other technical advances, the process of preparing and analysing tax returns has changed dramatically over (relatively) recent times, from one where taxpayers (and advisers) created and controlled the data on their tax affairs and determined in the first instance which information they would insert into their tax return to a situation where increasing amounts of data are created (or at least selected) by the ATO from data provided by third parties rather than the taxpayer.

This change undermines the original rationale for imposing the burden of proof on taxpayers – i.e. that the taxpayer would have better access to be information on their tax affairs than the ATO. It is time to update the burden of proof provisions to recognise the new realities and transfer the burden of proof to the ATO under the contra proferentem principle.

The current position is both illogical and unfair, and if one applies the same rationale for the original allocation of the burden of proof to the modern situation, the argument for transferring the burden of proof to the ATO is overwhelming – albeit we may need to tread water for a (short?) time while the ATO expands its pre-filling abilities to non-individuals.

The system needs0 to recognise that the burden of proof provisions have not kept up with the implications of technological change, and that personal taxpayers still bear the burden of proof, even though it is now the ATO which inserts and validates more and more data into tax returns.

It is past time to update the current burden of proof provisions. However, but only time will tell if the burden of proof provisions will catch up with their modern context.