- Request the Administrative Appeals Tribunal (AAT), which incorporates the Small Taxation Claims Tribunal (STCT), to review the decision; or

- Appeal to the Federal Court of Australia.

If a taxpayer does decide to seek review or to appeal, the request for review to the AAT or appeal to the Federal Court has to be lodged directly with the AAT or Federal Court respectively. The review or appeal should not be forwarded to the Australian Taxation Office.

The taxpayers' objections and appeal rights are found in Part IV C of the Taxation Administration Act (Cth.) 1953.

Review by the AAT of the Commissioner's decision is a less formal and generally less expensive option than a formal appeal to the Federal Court. The Federal Court is a superior court of record and usually operates with formal pleadings and pre-hearing procedures like discovery of documents. It conducts proceedings in accordance with the strict rules of evidence. The AAT, on the other hand, conducts more informal hearings with a minimum of formal documents. The AAT places emphasis upon informal conferences and mediation at which the issues in dispute are discussed and clarified in private. The STCT is less formal again than other AAT proceedings. There is an emphasis on mediation and resolving disputes without the need for a formal hearing. However, a taxpayer may only request that a decision be reviewed by the STCT if:

- The amount of tax in dispute is less than $5,000.00; or

- The disputed decision is one that refuses an extension of time within which to make an objection.

An application to the STCT must be accompanied by the prescribed fee of $61.00 for each assessment under review. This amount is not refundable. Other applications to the AAT must be accompanied by the prescribed fee of $606.00 for each decision under review. This fee will be refunded if the AAT certifies that proceedings have terminated in a manner favourable to the taxpayer whether by mediation or by formal hearing.

Whether proceeding either to the STCT or the AAT, the taxpayer's application must be in writing and must set out the reasons for the taxpayer's application.

Once the AAT sends to the Australian Taxation Office a copy of the taxpayer's application to the AAT (or STCT), the Commissioner of Taxation will provide the taxpayer and the AAT with a copy of the relevant documents which the Commissioner considers are necessary for the review, together with a statement of the reasons for the Commissioner's decision.

It is advisable for the taxpayer to also make an application under the Freedom of Information Act (Cth.) 1982 in order to access all documents relating to the relevant decision held by the Australian Taxation Office. This may well provide additional helpful documents beyond those which the Commissioner is obliged to discover to the AAT.

The AAT then calls a compulsory conference. At this conference, the issues in dispute are discussed. The conference may result in a resolution of the issues or a clarification of the issues for a hearing. The AAT also has provision for mediation of the dispute with the consent of the parties.

The AAT is independent of the Australian Taxation Office and is able to reconsider the matter in dispute and make a fresh decision, including the exercise of any discretion the Commissioner of Taxation may exercise.

One advantage of the AAT is that the taxpayer will bear his own costs. In the Federal Court, for instance, a taxpayer may well face the prospect of having to pay a proportion of the Commissioner of Taxation's costs if the appeal is unsuccessful.

The STCT conducts its hearings in public unless the taxpayer can satisfy the tribunal that the hearing should be in private. The AAT conducts hearings in private only if the taxpayer requests it. Otherwise, the hearing would be in public.