While the Australian Taxation Office (ATO) generally takes a cooperative approach to obtain documents or information, in some cases, it may use its formal access powers.
This article explores the ATO’s formal access powers which allow it to gain access to premises and documents for the purposes of laws it administers.
Scope of the ATO’s powers
The ATO’s access powers may be used to probe into the tax affairs of a person who is subject to the ATO’s compliance activity, or to make general enquiries – for example, to identify persons engaged in a particular activity.
Access powers can only be used:
- By authorised persons.
- In good faith.
- For the purposes of the law the ATO is administering.
Accessing land, premises or a place
The ATO’s formal access powers enable immediate access to land, premises, or places, albeit with prior notification in most cases. Before entering premises, efforts are made to coordinate with authorised personnel or accommodate delays if advisers are unavailable. For residences, alternative access methods are considered, with at least two officers attending, including a female officer if needed.
Timing of visits is discussed beforehand, typically during business hours, although flexibility is offered to suit circumstances. Ensuring document integrity is paramount, with options such as securing documents off-site if needed. The ATO asserts its statutory right to access and remains protected from trespass allegations when acting within its legal authority. Formal access powers may be invoked if cooperation wanes or if concerns arise regarding document integrity or disclosure.
Providing reasonable facilities and assistance
The ATO emphasises the legal obligation for land, premises, or place occupiers to provide reasonable facilities and assistance during ATO visits to exercise access powers. This includes granting access to photocopiers, telephones, electricity, and computer systems, as well as ensuring adequate space for work. The ATO may request assistance with locating documents, providing computer passwords, or explaining systems to access necessary information. Failure to comply with these requirements constitutes an offence, potentially leading to prosecution in cases of obstruction. The ATO aims to minimise disruptions during these visits and ensures that records are left undisturbed after searches.
Copying and removing information
The ATO’s access powers extend to all relevant materials, whether paper-based or stored electronically. Electronic storage mediums encompass computers, servers, and even mobile devices. The ATO is authorised to make copies or take extracts of documents pertinent to their inquiries, including unopened mail found on premises, yet material irrelevant to their purpose cannot be copied or seized without consent.
Techniques for copying include photocopying, scanning, or photographing, and records of removal are maintained, with the preference to copy documents onsite. If removal is necessary, agreements are executed, and detailed records provided.
Third-party records, held by entities like lawyers or accountants, may also be accessed, with attempts made to inform the taxpayer beforehand, unless circumstances warrant otherwise, such as safety concerns or infeasibility. When accessing third-party premises, agreements are sought regarding document inspection, especially concerning legal privileges.
Interviews during access
During access visits, the ATO may conduct interviews where they may ask questions related to the purpose of their visit, such as inquiries about the location of records. While individuals are obliged to answer these questions, the ATO cannot insist on answers to unrelated queries. In many cases, interviews proceed cooperatively without the need for formal powers. However, the ATO may only ask additional questions beyond the scope of the visit if individuals are informed of their right not to answer and agree to respond. Questioning must be conducted in good faith and aligned with the laws administered by the ATO, and objections will be respected. If individuals refuse to provide further information cooperatively, the ATO may resort to using its formal powers to obtain it, provided there are reasonable grounds to do so.
Access without notice
While individuals are typically informed before a visit to access documents or information, exceptions occur in cases of suspected tax evasion, fraud, or potential document tampering. In such instances, the ATO must reasonably believe that a cooperative approach is futile and that relevant documents are present. If individuals are absent during these unannounced visits, attempts are made to contact them or their legal representatives. The ATO may proceed with the access and quarantining of documents if an individual or their representative cannot be contacted.
At third-party premises, similar procedures are followed, with efforts made to contact the occupier or custodian of records. The ATO may delay examination briefly to allow individuals to consult with representatives, guided by considerations of document integrity. The occupier of the premises is provided with the relevant statutory provisions and information setting out their rights and obligations in relation to the access, with access approved only by designated senior officers.
Obstructing the ATO’s access
The ATO’s right of full and free access allows it to take reasonable steps to remove a physical obstruction to its access, including removing the obstruction, seeking an injunction where there are concerns that the documents could be lost, tampered with or destroyed, or taking prosecution action.
In exceptional circumstances, and with the approval of a senior officer, the ATO may need to use force to gain access to places or premises. The ATO prefers to use a master key or engage the services of a locksmith rather than break a lock, and where practicable, it will discuss its intended method of gaining access with you beforehand.
In cases where the ATO suspects a criminal breach – for example, a serious offence or fraud, it may request the Australian Federal Police to execute a search warrant. Under a search warrant, the original documentation is seized and removed from your premises – only documents described in the warrant can be seized.
Key takeaways
While the ATO generally adopts a cooperative approach, its formal access powers empower it to ensure compliance with tax laws. From accessing premises to conducting interviews and handling information, stakeholders must be aware of their rights and responsibilities. Compliance with access requests is crucial, as obstruction can lead to legal consequences. By adhering to established procedures and facilitating ATO visits, individuals and entities can navigate the complexities of ATO access powers effectively.
