From moral duty to rule of law - lessons from the United States in treating taxpayers fairly

Tax authorities both in Australia and the United States aspire to treat taxpayers fairly. This article assesses the extent to which these aspirations have been recognised in formal legal rules in both jurisdictions. It shows that the United States Congress has enacted a number of statutory provisions designed to promote fair treatment of taxpayers and provide formal sanctions against the Internal Revenue Service for failures to treat taxpayers fairly. In contrast, in Australia, the Tax Office's commitment to treat taxpayers fairly remains little more than an aspiration or moral duty. There has been minimal recognition by either the judiciary or the legislature of any legally enforceable taxpayer right to fair treatment. From the analysis of the two jurisdictions, this article identifies a number of lessons for Australia from the United States' approach to providing taxpayers with legal rights to fair treatment.