Tax Fraud Investigations
If you are a professional accountant and the ATO is investigating one of your clients, you should be informed about their powers of investigation and about your rights to withhold or disclose information.
There are two ways for the ATO to obtain material from the offices of external professional accountants. The Australian Tax Office can enter your premises, ask to view documents relating to your clients and copy them. They may not take items away. Alternately, the ATO can get the Australian Federal Police to issue a warrant to search the premises. An ATO officer will attend with them to assist in the search. Where a warrant is issued, we advise you to read it carefully as the AFP is allowed to seize documents, but only if they are described in the warrant.
What if the ATO asks to search my office without a warrant?
I the ATO asked to search your premises without a warrant you should do the following:
- Ask the ATO officer to produce their authority as only authorised officers are allowed to use access powers;
- Write down the name of the ATO officer who attended;
- Ask under which Act they are making their enquiries and the purpose of their enquiry;
- Ask which particular records are being inspected.
If this information is supplied, you are then required to provide reasonable facilities and assistance to allow the officers to access and copy the materials requested. You don’t have to answer any questions except those that will help the ATO officers to locate the records.
ATO officers can copy computer records electronically or print a hard copy.
There are guidelines which prevent the ATO from accessing documents which are confidential between taxpayers and their external professional accounting advisors. The guidelines don’t apply to in-house accountants. The guidelines cover three types of documents: source documents, restricted source documents and non-source documents.
The ATO can ask to see source documents, which include traditional accounting records such as ledgers, journals, working papers for financial statements, profit and loss accounts and balance sheets.
They can also look at documents comprising the permanent audit file including those that outline an organisation’s history, structure, chain of command, memorandum and articles, chart of accounts and any continuing contracts, such as leases.
The Accountant’s Concession
“The ATO acknowledges that taxpayers should be able to consult with their professional accounting advisors to enable full discussion in respect of their rights and obligations under tax laws and for advice to be communicated frankly.” This allowance is called “The Accountant’s Concession”. If you invoke this concession, the ATO officers will have to contact their local access specialist.
Advice papers given to a taxpayer may be considered to be restricted source or non-source documents and access to them require exceptional circumstances.
Legal professional privilege
Any communication by your client, or on behalf of your client to a lawyer is subject to legal professional privilege. It does not cover documents which provide evidence of transactions.
Armstrong Legal has a team of criminal lawyers who are experienced in dealing with the Australian Tax office and the Australian Federal Police.
If you have require advice or representation in relation to tax fraud or tax evasion or in any other legal matter, please contact Armstrong Legal.
WHERE TO NEXT?
If you suspect that you may be under investigation, or if you have been charged with an offence, it is vital to get competent legal advice as early as possible. Our lawyers are highly specialised in corporate crime and will be able to guide you through the process while dealing with the various authorities related to your matter.