Match the adviser to the problem
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| Stage | Accountant or tax agent | Specialist tax-dispute lawyer | Commercial lawyer with tax expertise |
|---|---|---|---|
| Audit or review | Reconcile returns and source records; explain accounting treatment. | Assess legal exposure, information powers and privilege. | Connect the response with contracts, ownership and business decisions. |
| Objection | Prepare calculations and evidence; handle issues within expertise. | Develop difficult statutory grounds and litigation strategy. | Frame grounds alongside transaction documents and commercial consequences. |
| Penalties | Explain return preparation and reasonable-care evidence. | Analyse penalty provisions and remission grounds. | Coordinate conduct evidence, legal advice and settlement objectives. |
| Part IVA or legal interpretation | Provide the financial model and transaction history. | Often appropriate for specialist anti-avoidance analysis. | May lead the commercial context and involve specialist counsel. |
| ART | Can assist with evidence and, subject to applicable rules, representation. | Prepare witnesses, submissions and merits-review strategy. | Assess fit and bring specialist advocacy support where needed. |
| Federal Court | Usually provides accounting or expert support. | Court procedure and tax litigation expertise are central. | May instruct counsel and manage related commercial issues. |
| DPN | Establish lodgement, payment and liability records urgently. | Advise on notice validity, remission, defences and recovery. | Assess director duties, finance, co-director issues and business sale consequences. |
Privilege and the accountants’ concession are different
Legal professional privilege depends on the purpose and confidentiality of a communication, including the dominant purpose of obtaining legal advice or use in litigation. Copying a lawyer into an existing document does not make it privileged. A third-party document may qualify in the right circumstances, but ordinary source records do not become protected merely because a lawyer holds them.
The ATO’s accountants’ concession is an administrative practice covering certain professional accounting advice. It is not the same legal right as privilege and is subject to its own scope and exceptions. Agree document handling before producing sensitive advice; do not withhold material solely because it is labelled confidential.
When the tax dispute is also a commercial problem
Ask whether the disputed amount affects an upcoming completion, lender covenant, shareholder exit, director guarantee or solvency decision. A narrow answer about deductibility may not resolve those issues. A coordinated engagement can preserve the accountant’s knowledge of the records while adding legal analysis and negotiating experience.
Conversely, a simple omitted deduction supported by clear records may not justify a legal team. Ask the existing accountant to explain what remains disputed and why additional expertise is needed.
Compare fee structures on the same scope
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| Basis | Useful when | Question to ask |
|---|---|---|
| Fixed | The deliverable and documents can be defined. | What is excluded, and what triggers a variation? |
| Capped | The work has some uncertainty but needs a ceiling. | Is the cap firm, and what approvals are needed to change it? |
| Staged | The next step depends on prospects or an authority’s response. | What decision do I receive at the end of this stage? |
| Hourly | The volume or direction cannot sensibly be predicted. | What estimate, reporting and stop points will apply? |
Boutique or larger firm?
A boutique may suit a matter needing an accessible lead adviser and tightly defined work. A larger team may offer capacity for simultaneous deadlines, extensive evidence or several specialties. Neither size proves quality or price. Ask who will perform the work, who checks it, and how absences, urgent applications and specialist questions will be handled.
Eight questions to ask
- What exact decision and deadline must we deal with?
- Which part of the problem is accounting, legal or insolvency work?
- Who leads the strategy and who prepares the documents?
- What evidence is missing, including evidence against my position?
- What outcomes are realistically available?
- What does the first stage cost, include and exclude?
- What are the collection, interest and adverse-cost risks?
- When would you recommend counsel, an expert or a larger team?
Using Allenby Legal
Priya Gangatharan leads Allenby Legal’s advice and strategy. We can scope legal work alongside your accountant’s role and discuss whether the matter fits our practice. The right first step may be a limited review of the notice and key documents, rather than committing immediately to litigation.
Frequently asked questions
Can my accountant lodge an objection?
A registered tax agent can assist with objections within the scope of the services they are authorised and competent to provide. Check the particular issue and any representation requirements for later proceedings.
Must I use a lawyer at the ART?
No. Self-representation is possible and representation rules differ from court rules. Choose support suited to the complexity of evidence, legal issues and the applicable tribunal procedure.
Does hiring a lawyer make all my tax records privileged?
No. Privilege depends on the communication and its purpose. Existing source documents do not become privileged merely by sending them to a lawyer.
Official sources
- Taxation Administration Act 1953 — Part IVC and Schedule 1 Division 269
- ATO — Limits to our formal powers
- Administrative Review Tribunal — Taxation