Request for information or interview from the ATO
If you are under audit or investigation by the Australian Taxation Office (ATO), you may receive a request for information or interview from the ATO. If this happens to you, it is important that you contact King Lawyers immediately and get legal advice on your legal rights and obligations under the Australian tax laws. This will enable you to provide a proper response to the ATO’s request by the required deadline.
The ATO’s access and information gathering powers
The ATO has formal access and information gathering powers under the Australian taxation laws. These are strong and wide powers given to the ATO because they are necessary for the ATO to administer the tax and superannuation systems in Australia.
The ATO’s officers are required to use the ATO’s formal powers fairly, appropriately and professionally. The ATO may use those powers in carrying out audits, reviews or investigations under the tax laws.
If you have received a formal request for information or interview from the ATO, you should get legal advice from a tax lawyer immediately and provide an appropriate response to the ATO by the required deadline. This is important because there are usually heavy penalties, including criminal prosecution, for failing to respond to a formal request for information or interview from the ATO.
The ATO’s general approach to access and information gathering
The ATO’s general approach to getting information and documents from taxpayers is as follows:
- The ATO usually prefers to consult with taxpayers first and get the required information informally and cooperatively
- The ATO usually prefers to use its formal powers only where necessary and appropriate
- If the ATO is asking for information or documents, the ATO will inform taxpayers about their rights and obligations under the law as early as possible
- In most cases, the ATO will give taxpayers reasonable notice to inform them that the ATO intends to access the taxpayers’ premises or documents
- In exceptional circumstances, the ATO may take access of a taxpayer’s premises or documents without prior notice
- The ATO will take into account the taxpayers’ compliance costs in complying with the ATO’s request for information and will endeavour to minimise those costs for taxpayers as much as possible
- The ATO will provide taxpayers with a reasonable time (usually 28 days) to comply with its notices requesting information or documents and the ATO is willing to negotiate a shorter or longer time period as required
- The ATO will respect a taxpayers’ right to claim legal professional privilege for certain communications between the taxpayers and their lawyer
- If the ATO asks third parties about a taxpayer’s affairs, the ATO will usually tell the taxpayer before it makes the enquiry, but there are some circumstances where this may not be appropriate
ATO’s cooperative approach in getting information
The ATO prefers to gather your information informally and cooperatively by simply requesting it from you.
However, the ATO’s expectation is that you comply with the ATO’s request and provide the required information to the ATO by the required deadline.
In most case, the ATO is able to obtain the required information and documentation from taxpayers using this informal and cooperative approach. However, if the ATO is not able to get the required information in a cooperative way, the ATO will then consider using its formal powers.
In some cases, the ATO may consider it appropriate to use its formal powers from the very start. However, this is not common and a decision is made by the ATO on such matters on a case by case basis.
The ATO’s formal powers fall into two broad categories:
- ATO’s notice powers
- ATO’s access powers
ATO’s formal notice powers
The ATO’s formal notice powers may require a taxpayer to provide information, attend and give evidence or produce documents to the ATO.
It is important and necessary for taxpayers to seek legal advice and comply with a formal notice issued by the ATO. There are heavy penalties, including criminal prosecution, for failing to company with a formal ATO request.
Formal interview with the ATO
The ATO may issue a taxpayer with a notice to attend a formal interview. This happens if the ATO prefers to obtain information verbally, seek immediate explanations from a taxpayer or if there are no relevant documents or other information available.
It is important and necessary for taxpayers to seek legal advice and comply with a formal request to attend an ATO interview. There are heavy penalties, including criminal prosecution, for failing to company with a formal ATO request.
ATO’s formal access powers
The ATO’s formal access powers allow the ATO to gain access to a taxpayer’s premises and documents at all reasonable times. The ATO’s officers are required to only exercise this right of access for the purposes of the taxation and superannuation laws that are administered by the ATO.
In most cases, the ATO will give you prior notice before exercising an access power. However, in exceptional circumstances, the ATO may conduct access without notice (for example, if the ATO believes that documents may be destroyed by a taxpayer if prior notice is given by the ATO).
Limits to the ATO’s formal powers
In some situations, a taxpayer may be able to claim that the documents required by the ATO are protected by legal professional privilege. In those circumstances, the ATO officers will usually give you a reasonable opportunity to consult with your lawyer to make a claim for privilege.
Gathering offshore information by the ATO
The ATO has recently increased its focus on international tax issues, including major tax fraud and tax evasion. The ATO has specific powers to gather information and documents from overseas and the ATO regularly exchanges information with the tax authorities in other countries to detect and deal with tax fraud and tax evasion.
Gathering electronic information by the ATO
The ATO prefers to obtain information electronically where possible. The ATO considers this to be the most efficient and effective way of obtaining information from taxpayers.
Legal advice from expert tax lawyers in Australia
This content of this article is offered as general information only and should not be relied on as specific legal advice.
To get legal advice from King Lawyers on your specific circumstances, please contact us to arrange an initial consultation with our expert tax lawyers.