Primary Audits:

The effective administration of tax requires taxpayers to accurately report their income and relevant aspects of their financial affairs to the ATO. Whilst most Australians abide by their taxation obligations to the best of their ability, there may be reasons why certain relevant information has not been divulged to the ATO. This may due to lack of disclosure, failure to report and inaccuracies in what is revealed. Sometimes these mistakes are due to carelessness or negligence, other times it is due to evasion and concealment. It is at these times that the Commissioner of Taxation may exercise their powers to compel disclosure of the relevant information. Professional and sound legal advice from a Superannuation and Taxation Lawyer may be advisable, if not essential, to ensure that when you do face a tax audit that you fulfill your duties and comply with Australian Taxation law accurately.

There are many types of reporting requirements that may need further disclosure and investigation. One obvious example is a taxpayer’s annual return, a Business Activity Statement (BAS), company tax return are other examples. In addition there is a well established source of information flowing to the ATO from informers such as ex-employees, family members or management personnel. The primary method in which the ATO checks the accuracy and completeness of information provided is through an audit. The audit process is essentially the inquisition of a taxpayer selected after an assessment has been issued, sometimes several years after it has been issued. This may be due to the information disclosed, because a specific industry is being targeted or purely at random. There does not need to be suspicion or an investigation underway for an audit to occur. It is advisable to seek skilled legal and financial advice from an experienced Superannuation and Taxation Lawyer to ensure that you comply with your reporting and disclosure requirements should you be the subject of a tax audit.

There are many things that the commissioner may compel or request a taxpayer to do. Indeed, Australian taxation laws enshroud the commissioner with diverse, wide-reaching powers to formally investigate a tax payer.  This involves inspecting records under what is known as a section 236 notice, which for a business must be kept up to 5 years after completion of the activities to which they relate). This power has been described as ‘full and free access to all buildings, places, books, documents and other papers’. Obtaining legal advice from a skilled Superannuation and Taxation Lawyer may be immensely valuable in ensuring that you meet your disclosure requirements, and challenging the actions of the commissioner should they be ultra vires (outside the scope of the designated power) or lacking in legal authority.

In addition, it is important to be aware and understand your legal rights to ensure that you do not make any representations or disclosures to the ATO which may prejudice or incriminate yourself.  There may be protections available such as legal professional privilege which may provide you immunity from disclosure of certain communications between lawyer and client.  In addition there may be a reasonable and legally supported explanation or justification for a lack of disclosure, or inaccuracies/discrepancies in your disclosure that may absolve your from any penalties or fines.  For these reasons, comprehensive and complete legal and financial advice may be hugely rewarding and advantageous.

Should you require further information or wish to discuss your taxation matter with us please do not hesitate to contact our firm by telephone on (02) 9233 4048 or by email to info@navado.com.au.

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.