A small business owner receives a letter from the Australian Taxation Office (ATO) asking about a claim. If a model helped flag the return, what would the owner need to know to answer the officer’s concerns? In an article published by Austaxpolicy on 21 October 2026, Dika Sembiring examines that question from the perspective of small businesses in Western Australia.
The distinction matters before an officer reaches a decision. In 2024, the ATO told the Australian National Audit Office that seven of its 43 AI models automatically selected cases for compliance action. In Sembiring’s survey of 390 Western Australian small business owners and managers, only 29.7% of respondents knew the ATO used AI.
Sembiring argues that when a model influences an adverse outcome, the taxpayer should be told what it flagged and how that signal informed the officer’s reasoning. Timing matters: an explanation is most useful while the taxpayer can still decide which grounds to raise in an objection.
Read Dika Sembiring’s full article on Austaxpolicy.
Further reading: the Australian National Audit Office report and GITA’s related coverage of AI and Western Australian SMEs.
