ATO Services
Tax Litigation
When ATO disputes cannot be resolved through objection or AAT processes, tax litigation in the Federal Court or Full Federal Court may be necessary. Tax litigation is complex and high-stakes — experienced legal representation is essential to protect your position.
⚠ Appeals from the AAT to the Federal Court must be lodged within 28 days on a question of law. Federal Court proceedings have strict filing deadlines — act immediately.
Does This Sound Like You?
Common situations we help with.
The AAT ruled against you and you want to appeal
The AAT has decided your case in the ATO's favour and you believe the Tribunal made a legal error. You have 28 days to appeal to the Federal Court on a question of law — and you need experienced tax litigation counsel to advise quickly.
Your dispute involves a point of law that the AAT cannot resolve
Your dispute turns on a legal question — the correct interpretation of a statutory provision, the application of a principle to your facts — that requires Federal Court determination. You want to take the dispute directly to the Federal Court rather than through the AAT.
The ATO has commenced proceedings against you
The ATO has filed proceedings in the Federal Court to recover a tax debt or enforce a liability. You need legal representation to respond, defend the proceedings, and explore whether settlement is possible to avoid the cost and risk of a hearing.
The amount in dispute is large enough to justify court proceedings
Your dispute involves a substantial liability — large enough that pursuing it through the Federal Court is commercially justified, even accounting for legal costs. You want a realistic assessment of the merits, the costs, and the likely outcome before deciding whether to proceed.
Litigation has been running and you want to explore settlement
Proceedings have been commenced — either by you or the ATO — and are underway. The cost and uncertainty of a full hearing is concerning. You want to explore whether a negotiated settlement is possible that reduces the liability without the risk of losing at trial.
You're currently represented but want a second opinion on strategy
You're already in proceedings but have concerns about the litigation strategy being pursued or the advice you're receiving. You want a frank second opinion from experienced tax litigation counsel before a significant step or deadline occurs.
How It Works
Pursue your tax dispute through the Federal Court.
Describe the tax dispute, the outcome of the AAT or objection process, and the issue you want to litigate. A tax litigator will assess the merits and advise on the litigation strategy.
Submit Your RequestSubmit your request
Describe the dispute history, the amount in dispute, and the legal question you want determined.
Litigation prospects assessed
A tax litigator reviews the merits, the applicable legal principles, and the cost-benefit of proceeding.
Proceedings commenced
Court proceedings are filed within the required timeframe, with full representation through to hearing or settlement.
28 Days
Window to appeal an AAT decision to the Federal Court on a question of law — strict deadline, no extension
All 8 States
Tax litigation specialists matched across every Australian state and territory
Free
Initial consultation — understand the merits, the costs, and the realistic outcome before committing to proceedings
Many Settle
A significant proportion of Federal Court tax disputes settle before hearing — experienced counsel improves both the settlement prospects and the terms
Before You Proceed
Practical questions about tax litigation.
What is the difference between going to the AAT and the Federal Court? +
The AAT conducts a full merits review — it considers all the facts and law and can substitute its own decision for the ATO's. The Federal Court reviews the AAT on questions of law only — it cannot reconsider facts already determined. You can also choose to take your dispute directly to the Federal Court under Part IVC, bypassing the AAT, which may be preferable for disputes that turn entirely on legal questions.
How much does Federal Court tax litigation typically cost? +
Federal Court litigation is expensive — legal costs for a contested hearing can range from tens of thousands to several hundred thousand dollars depending on complexity, volume of documents, and hearing length. A careful cost-benefit analysis is essential before commencing. Court filing fees are relatively modest by comparison. Costs orders are available but recovery is never guaranteed.
Does the ATO settle Federal Court proceedings? +
Yes — the ATO has a settlements policy that applies to all disputes, including Federal Court proceedings. The ATO will settle where it believes settlement is in the interests of good tax administration and reflects a reasonable assessment of the legal and factual merits. Experienced tax litigation counsel can negotiate settlements that significantly reduce the liability and costs compared to proceeding to a full hearing.
What is legal professional privilege and does it protect my communications with my tax lawyer? +
Legal professional privilege (LPP) protects confidential communications between a client and their lawyer made for the dominant purpose of obtaining legal advice or in contemplation of litigation. The ATO cannot compel disclosure of LPP-protected documents. LPP is a critical protection in tax disputes — particularly in audits and investigations — and one of the strongest reasons to engage a lawyer rather than an accountant to manage a dispute.
If I win, can I recover my legal costs from the ATO? +
The Federal Court has a broad discretion to award costs — costs generally follow the event, meaning the loser pays the winner's costs. In successful tax litigation against the ATO, a costs order is possible but not guaranteed. Party-party costs recovery rarely covers all your actual legal costs — typically 60–70% of actual expenditure. The potential for a costs order is a factor in the cost-benefit analysis, but should not be the primary reason to litigate.
Do I have to pay the disputed tax while Federal Court proceedings are on foot? +
In principle yes — the assessment is payable even while disputed, and GIC continues to accrue. However, as with AAT proceedings, you can request the ATO defer enforcement while the litigation is on foot. The ATO generally agrees to hold enforcement action during bona fide litigation. If you succeed, the assessment (and accrued interest) is reversed.
Have a question not covered here? Submit your request and a tax litigator will be in touch.
Request a Free Consultation