Tax appeals after an ATO objection: the ART and Federal Court

If the ATO disallows your objection, a tax appeal is generally the next step: you can apply to the Administrative Review Tribunal (ART) for review, or appeal to the Federal Court. Either way, the deadline is 60 days after you are served with notice of the objection decision (Taxation Administration Act 1953 (TAA), ss 14ZZ, 14ZZC and 14ZZN).

The ART is independent of the ATO. It replaced the Administrative Appeals Tribunal on 14 October 2024, and tax reviews are generally dealt with in its Taxation and Business jurisdictional area (Administrative Review Tribunal Act 2024 (ART Act), s 196(1)(g)). Section references below are to the TAA unless we say otherwise. For the objection stage, see ATO objections.

When can you take an ATO decision to the ART or Federal Court?

Usually only once there is an objection decision. You can then generally either apply to the ART or appeal to the Federal Court (s 14ZZ(1)), not both.

Two other situations open the same routes:

• No decision on your objection. If the ATO hasn't decided within 60 days (longer if it asked for information), you can give it written notice requiring a decision. If there is still none 60 days later, the objection is treated as disallowed (s 14ZYA). The ATO says it must then serve written notice of the deemed decision (ATO ruling TR 2011/5 para 38), and the 60 days for a review or appeal run from service of notice of the decision (ss 14ZZC(1), 14ZZN). If no notice arrives, don't assume the clock hasn't started: get advice on your deadline straight away.
• A late objection refused. If the ATO refuses to accept an objection lodged out of time, you can ask the ART to review that refusal (s 14ZX(4)). There is no fixed deadline for this, but the ART must dismiss an application it considers wasn't made within a reasonable time, unless there are special circumstances (ART Act s 20). So apply as soon as you can and, to be safe, within 28 days after you are given the refusal notice. See objection time limits and late objections.

What are the time limits for a tax appeal?

Step	Time limit	Law
Apply to the ART for review of an objection decision	60 days after you are served with notice of the decision	TAA s 14ZZC(1)
Appeal to the Federal Court against an objection decision	60 days after you are served with notice of the decision	TAA s 14ZZN
Ask for an ART decision to go to the guidance and appeals panel	28 days after the ART gives its statement of reasons	ART Act s 125; TAA s 14ZZB(3)
Appeal from the ART to the Federal Court on a question of law	28 days after the ART gives its statement of reasons (24 December to 14 January not counted)	ART Act s 174(1)(a), (2A)

The 60 days run from service of the notice, not from when you open it or speak to the ATO about it. There is no statutory power to extend the time for a Federal Court appeal (s 14ZZN; Oracle Corporation Australia Pty Ltd v Commissioner of Taxation [2025] FCAFC 145 at [2]).

The ART can extend the time to apply, even after it has expired, if that is reasonable in all the circumstances (ART Act s 19(2)–(3)). So if the 60 days have passed, an ART application with an extension request is generally the only way forward. The ATO can be notified and oppose the extension (ART Act s 19(5)–(7)), so treat an extension as a fallback, not a plan.

ART or Federal Court: where should your tax appeal go?

The ART is usually the natural forum where the dispute turns on the facts, the evidence or a discretion. The Federal Court can suit a dispute about what the law means, but it carries a real costs risk.

	ART	Federal Court
What it does	Merits review, with all the Commissioner's powers and discretions (ART Act ss 54, 105)	Court hearing, and it can make any order it thinks fit (s 14ZZP)
Procedure	Less formal, not bound by the rules of evidence (ART Act ss 50, 52)	Formal, and the rules of evidence apply
Privacy	Private hearing if you ask (s 14ZZE). If it is private and no Federal Court appeal is lodged, the decision is framed so far as practicable not to identify you (s 14ZZJ)	Hearings and judgments are generally public
Costs if you lose	Each side generally bears its own	Usually ordered to pay a large part of the ATO's costs
Recovery of the tax	Continues, but a small business can ask for an order limiting it (ss 14ZZH, 14ZZM)	Continues (s 14ZZR)
Further appeal	Guidance and appeals panel, or Federal Court on a question of law	Full Federal Court, then the High Court only with special leave

Because the ART can exercise the Commissioner's discretions, it can decide afresh discretionary questions in the decision under review, such as whether a penalty should be remitted (see ATO penalties). A direct Federal Court tax appeal is also a full hearing, not just a review of a legal point, and suits cases where a binding judgment matters.

Two rules apply in both forums. You are limited to the grounds in your objection unless the ART or the Court orders otherwise, and for an assessment you must prove that it is excessive or otherwise incorrect and what it should have been (ss 14ZZK, 14ZZO). Thin grounds narrow the whole case, which is why we draft objections with a hearing in mind (see how to write an ATO objection).

How an ART tax review works

1. Application. It must be in writing and state the reasons for the application (s 14ZZC(2)–(3)). The ART charges an application fee under its rules (ART Act s 296), so check the current fee.
2. The ATO's documents. Within 28 days after the ART notifies it, the ATO must give the ART its reasons, the assessment, your objection, the objection decision and other documents it considers necessary (s 14ZZF(2)). You receive copies (ART Act s 27).
3. Directions. The ART sets a timetable for evidence and submissions (ART Act ss 79–80).
4. Conferences and dispute resolution. The ART can refer the matter to conferencing, mediation, neutral evaluation or conciliation (ART Act ss 4, 87). The parties must act in good faith (ART Act s 87(2)), and what is said generally can't be used as evidence later (ART Act s 88).
5. Hearing. Each side presents documents and witnesses, and makes submissions.
6. Decision. The ART affirms, varies or sets aside the objection decision, substituting its own decision or sending it back to the ATO (ART Act s 105), with written reasons (ART Act s 111).

Do you have to pay the tax while you dispute it?

Legally, yes. A pending review or appeal doesn't affect the decision, and the ATO can recover the tax as if no dispute were running (ss 14ZZM(1), 14ZZR).

In practice, the ATO's approach depends on who you are. Under its practice statement on disputed debts (PS LA 2011/4), it requires large business and wealthy group taxpayers (broadly, members of groups with turnover or net assets over $250 million, and significant global entities) to pay in full or enter a 50:50 arrangement (paras 1, 6). For other taxpayers it assesses the risk, and where your affairs are straightforward and the risk is low, it won't take recovery action while the review or appeal is on foot (paras 9–10). General interest charge keeps accruing either way.

The small business exception

If the decision is an assessment relating wholly or partly to carrying on a business, made in relation to a small business entity (generally aggregated turnover under $10 million: Income Tax Assessment Act 1997, s 328-110), you can ask the ART, once you have applied for review, for an order staying or otherwise affecting it (ss 14ZQ, 14ZZB(6), 14ZZM(2); ART Act s 32(2)). It is only available at the ART, not in a Federal Court appeal. You must satisfy the ART that the review and the request aren't frivolous, vexatious, misconceived, lacking in substance or intended to unduly impede the administration of the tax law (s 14ZZH(2)).

Orders of this kind can direct the ATO not to sue to recover the amount, to accept payment by instalments, or not to issue garnishee notices (s 14ZZH, note 1). They can't defer the due date or remit interest (note 2), so general interest charge keeps running.

The ATO's 50:50 arrangement

Under its practice statement on disputed debts (PS LA 2011/4), if you pay all undisputed debts and at least 50% of the disputed principal tax, and meet conditions such as cooperating with information requests, the ATO generally defers recovery of the balance until 14 days after the dispute is finally decided. It also remits 50% of the GIC on the unpaid balance for that period, or 75% for a case in its Test Case Litigation Program (paras 25, 27–28, 33). The arrangement is subject to the ATO's risk assessment, some debts are excluded (for example, superannuation guarantee debts), and the ATO can revoke it if the risk changes (paras 38, 42–43). See GIC remission.

Will you have to pay the ATO's costs if you lose?

At the ART, generally no. The ART Act leaves any power to order costs to other legislation (ART Act s 115(1), note), and the TAA gives none for tax reviews, so each side generally bears its own costs, win or lose.

In the Federal Court, usually yes. The loser is usually ordered to pay a substantial part of the winner's legal costs.

Either way, you pay your own lawyers as the matter runs, and a Federal Court winner usually recovers only part of its costs. For how we charge, see fees.

Can you appeal an ART decision?

Yes, in two ways, each with a 28-day deadline:

• Guidance and appeals panel. A party can apply to the ART President to refer the decision to the panel (ART Act ss 123, 125), explaining why it raises an issue of significance to administrative decision-making or may contain a material error of fact or law (ART Act s 124(2)). The President decides whether to refer it (ART Act s 128). The route isn't open for consent decisions, or for decisions made by the panel itself or by a Tribunal that included a judge (ART Act s 123(4)–(5)). In tax cases, more time is only possible if you ask before the 28 days end (TAA s 14ZZB(3)).
• Federal Court on a question of law. A party can appeal (ART Act ss 172, 174). The Court can extend the time (ART Act s 174(2)), and the clock pauses while a panel application is pending (ART Act s 174(3)). The Court can affirm or set aside the decision or send it back to the ART (ART Act s 176).

The ATO can use these routes too, so a win at the ART may not end the matter. After a decision by a single Federal Court judge, a further appeal lies to the Full Federal Court, then to the High Court only with special leave (see s 14ZZQ(2)).

Is there funding for a tax test case?

The ATO's Test Case Litigation Program can help meet some or all of a taxpayer's reasonable litigation costs where the case matters beyond the particular dispute (ATO, Test case litigation program, last updated 8 July 2026). It requires all three of:

• genuine uncertainty or contention about how a tax or super law operates,
• a public interest in the issue being litigated, and
• funding promoting the program's objects, for example because without it the issue may not be properly litigated.

It doesn't fund disputes that turn solely on facts, and generally won't fund avoidance or evasion cases or taxpayers with a poor compliance record.

The ATO's separate small business litigation funding program closed to new referrals on 30 September 2025, although existing funding agreements continue until the matter is finalised (ATO, Small business litigation funding, last updated 30 September 2025). The ATO also refers small businesses to the Australian Small Business and Family Enterprise Ombudsman's Tax Concierge Service.

Can you settle a tax dispute before the hearing?

Yes. Under the ATO's Code of settlement (PS LA 2015/1), either side can start settlement negotiations at any stage, and statements made in those negotiations are not admissions of liability and can't be given in evidence.

At the ART, a signed written settlement can be given to the Tribunal, which can then make a decision in those terms without a hearing if it is satisfied the decision is within its powers (ART Act s 103). If the agreement was signed in a dispute resolution process, either side has 7 days to withdraw before the ART acts on it (ART Act s 103(1)(c)).

How we help

• Deadline and forum. We confirm your deadline and which forum suits your dispute, costs risk included.
• Running the case. We prepare the application and evidence, including independent accounting or valuation evidence, handle conferences and settlement talks, and brief experienced tax barristers for hearings.
• Cash flow. We seek small business orders limiting recovery and negotiate 50:50 or other arrangements with the ATO.
• Your accountant. We keep them involved, as in all our ATO audit and objection work.

Next step

Send us the objection decision and the ATO's reasons, your objection, the assessment or decision you objected to, and the date the objection decision reached you. In a first call we'll confirm your deadline, whether the ART or the Federal Court suits your dispute, and what evidence you will need.