In early 2005, after extensive consultation with its members to identify the issues arising in the application of Division 7A, the Institute commenced its lobbying efforts with two detailed submissions lodged on 31 May 2005 – one submission with the Commissioner of Taxation identifying issues that could be addressed administratively, e.g. through the provision of further guidance, and another submission with the Minister for Revenue and Assistant Treasurer highlighting issues that we thought required legislative resolution.  
 
On 8 August 2006, we wrote to the Commissioner again asking that he consider the exercise of an administrative discretion to deal with breaches of Division 7A that have already occurred in a more equitable manner, particularly where it is apparent that the breaches were inadvertent or where the mischief intended by Division 7A has not occurred. This submission is here. 
 
On 27 September 2006, the Institute wrote to Treasury on the interaction between Division 7A and the Fringe Benefits Tax Assessment Act 1986 (“FBTAA”) and highlighted the residual application of the FBTAA to loans made by a private company to a shareholder, or an associate of a shareholder, that are not deemed dividends because they meet the criteria in section 109N, e.g., the loan is in writing and the rate of interest payable on the loan for years of income after the year in which the loan is made equals or exceeds the benchmark interest rate for the year. This submission can be viewed here. 
 
The Commissioner, in response to our submission on 8 August 2006, has advised that they will be seeking to enforce Division 7A only in the “highest risk” cases. In reply, we wrote to the Commissioner providing our initial thoughts on the criteria that would exclude taxpayers from being treated as “highest risk” cases. This submission is here.