【Tax】ATO's power to investigate you

In Australia, you may wonder:

1. Can ATO ask you to provide your offshore information and assess your overseas income?

2. Can ATO access your premises for the tax investigation?

3. What if I do not cooperate with this request?

 1 

       Commissioner's wide power

s.353-10(1) and s.353-15(1) of TAA Sch 1 gives very wide powers of access for the taxation officer to obtain information and evidence.

s.353-10(1) said that the Commissioner may by notice in writing require you to do all or any of the following:

 (a)  to give the Commissioner any information that the Commissioner requires for the purpose of the administration or operation of a * taxation law;

 (b)  to attend and give evidence before the Commissioner, or an individual authorised by the Commissioner, for the purpose of the administration or operation of a taxation law;

 (c)  to produce to the Commissioner any documents in your custody or under your control for the purpose of the administration or operation of a taxation law.

s.353-15(1) gives the Commissioner or an individual authorised by the Commissioner access to premises, documents etc.

 (a)  may at all reasonable times enter and remain on any land, premises or place; and

 (b)  is entitled to full and free access at all reasonable times to any documents, goods or other property; and

 (c)  may inspect, examine, make copies of, or take extracts from, any documents; and

 (d)  may inspect, examine, count, measure, weigh, gauge, test or analyse any goods or other property and, to that end, take samples.

 2

       Impact on the taxpayer or the taxpayer's accountant

Failure to comply with a s.353-10 notice may be a breach of TAA s8C or 8D and may carry criminal penalties.

A taxpayer cannot justify non-compliance with a s.353-10 notice on the grounds of a contractual duty of confidentiality or by relying on the privilege against self-incrimination.

 3

     "offshore information notice"

The Commissioner may issue an "offshore information notice" under TAA Sch1 s.353-25 requiring a taxpayer to produce information or documents that are located outside Australia and that relate to the assessment of the taxpayer.

An offshore information notice must specify a period, of at least 90 days after it is given to you, within which you are to give the information or produce the documents or copies.

If the taxpayer does not provide the information requested, the information is not admissible in later proceedings disputing the taxpayer's assessment.  It means the taxpayer would be prevented from using hte information in a later attempt to challenge an assessment or amended assessment issued by the Commissioner.

 4

      Legal privilege

A taxpayer may be able to claim legal professional privilege to resist production of the documents, but only if they are communications created for the dominant purpose of obtaining legal advice or in preparation of litigation (Esso Australia Resources v FC of T 2000 ATC 4042).

Source：PS LA 2004/14 - Access to 'corporate board documents on tax compliance risk'

Disclaimer: This article is intended to provide general information only and does not constitute professional advice for specific circumstances.  It should not be relied upon as a substitute for tailored advice.