The Australian Taxation Office (ATO) conducts audits to ensure that businesses and taxpayers are compliant with tax laws.
If it cannot obtain the documents required to support an audit under a cooperative approach, or in exceptional circumstances such as when it suspects tax fraud or tax evasion have occurred, the ATO may use its formal powers to access documents and evidence.
What are the ATO’s formal access powers?
The ATO is led by the Commissioner of Taxation. The Commissioner may by notice in writing require you to do any of the following, as outlined in the key legislative provisions:
- Give information to the Commissioner which they require for the purpose of the administration or operation of a taxation law.
- 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.
- Produce documents to the Commissioner – any documents in your custody or under your control for the purpose of the administration or operation of a taxation law.
- Give information, attend and give evidence, and produce documents – the Commissioner may require you to do any or all of the above, as outlined in section 353-10 of the Taxation Administration Act 1953.
- Give information about rights or interests in property – further information is provided in section 354-5 of the Act.
Accessing overseas information
The ATO has formal powers to obtain information and evidence from overseas related to the assessment of a tax-related liability of yours.
Taxation law access visits
The ATO also has powers to access your premises and documents for the purpose of enforcing a taxation law that it administers.
When using these powers, the ATO may enter and remain on any land, premises or place and have full and free access to books, documents, goods, or other property. It can make copies of documents, but it cannot seize or remove them without your consent.
Penalties and prosecution may apply if you obstruct access or do not provide reasonable assistance to the ATO.
Limits to access powers
The ATO’s access powers are limited by legal professional privilege, the accountants’ concession, and the corporate board advice concession.
However, in exceptional circumstances, such as when investigating illegal activity, the ATO may override these privileges and use its formal access powers.
The ATO’s access powers are not restricted by claims of confidentiality or privilege against self-incrimination.
Although it prefers to pursue a cooperative approach, the ATO has a range of formal powers to access documents and evidence, to ensure that it can enforce the taxation laws it administers. The ATO may require you to give information (including about rights or interests in property), attend and give evidence, and/or produce documents. It also has the power to access overseas information, and to physically access your premises and documents.