The Excess Contribution Tax issue made the front page of the Financial Review earlier this week, mainly because of the increase in cases against advisers.
What surprises me a little is the lack of concern about the decision in the McMennemin case. In that case the AAT concluded that it didn't have jurisdiction to review the ATO decision not to determine that "special circumstances" existed in relation to an excess contribution assessment.
Unusually, the ATO appealed the decision (despite being successful before the AAT), and the Federal Court confirmed the AAT approach.
Whilst amendments made in November 2010 now include a specific right of objection, these amendments weren't retrospective. Consequently, there is no right to object to any ECT assessments made before the 2010 amendments where the ATO refused to determine that special circumstances existed.
For those members who, before the 2010 amendments, unsuccessfully asked the ATO to consider whether special circumstances existed, they are now left with no avenue of appeal. Given the number of assessments that have issued, the number of members adversely affected could be considerable.
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