• Audits and Investigations


    While we rely on the honesty of taxpayers and grant recipients to voluntarily self assess and comply with their tax and other obligations, it is necessary to protect the integrity of our tax system and ensure equity for all taxpayers, accordingly we conduct audits and investigations. 

    This ensures the correct amount of tax or duty is paid, regardless of whether the taxpayer is a business or an individual. We also check the eligibility of grant recipients.

    Where an error has occurred due to a lack of understanding of legislative requirements, we work with the taxpayer or grant recipient to bring their affairs up to date and assist them to understand their future tax obligations.

    We identify who to audit and investigate through:

    • information received from third parties including government agencies and members of the public
    • data matching
    • IT-assisted research
    • risk analysis
    • field visits and other audits
    • random sampling and routine verification of the tax base

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    The Audit and Investigation process

     

    What happens when you are selected for an audit or investigation?

    In most cases we will:

    • write, telephone or visit you to let you know that an audit/investigation will be conducted
    • explain the process and scope of the audit/investigation
    • specify the records to be produced
    • give you a reasonable period to assemble those records
    • arrange a time and place to conduct the audit/investigation
    • confirm arrangements in writing

    Before the audit/investigation starts, the investigator will show you their identification and authority. During the audit/investigation, the investigator will conduct interviews and make enquiries to establish your compliance with the particular legislation, and will examine and test some of your records. You will be advised of the outcome and any proposed action.

     

    Preparing for an audit/investigation

    You should ensure that all relevant records are ready for examination. Please inform the investigator beforehand if you require more time to collate the records.

    The length of the audit/investigation generally depends upon how quickly the information is provided and how comprehensive it is.  When dealing with complex matters, you may wish to ask your legal or financial representative for advice.  We encourage you to do this if it helps you to understand the issues involved.

    Where subcontractor determinations are involved, only the subcontractor and their representative is allowed to be in attendance.

    If you have any questions about the arrangements or processes, please contact the investigator.

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    Your legal obligations

    During an audit/investigation, you are required to provide the investigator:

    • reasonable assistance and facilities
    • complete and honest answers and explanations to questions
    • prompt, full and free access to all relevant information, records, documents, data and systems as required.

    Investigators have authority to:

    • gain access to and search premises and remain there
    • inspect, examine, copy and where necessary seize books, documents or records
    • search premises
    • require a person to answer questions and provide information
    • require a person to give reasonable assistance.

     

    Your rights

    Before an audit/investigation, you have the right to:

    • ask for reasonable time to produce your records
    • negotiate the time and place for the audit with the auditor
    • receive written confirmation of those arrangements.

    During an audit/investigation, you have the right to:

    • sight the investigator’s identification and authority
    • expect the investigator to be professional and courteous
    • involve your professional representative in the process
    • ask how long the audit or investigation will take
    • expect your affairs to be treated with strict confidentiality
    • obtain a receipt for records or other material the investigator removes from your premises
    • be given the opportunity to explain the reasons for irregularities, discrepancies, decisions etc.

    At the end of an audit/investigation, you have a right to:

    • receive an explanation of the results or findings
    • ask the investigator how any penalty tax and interest provisions have been applied
    • ask for advice about the objection and appeal process
    • discuss any aspect of your audit or investigation with the investigator or their manager.

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    Penalties

    Penalties will generally apply if tax or duty has not been paid or has been underpaid. Details of the penalties applicable can be found in the following Commissioner's Practices:

     

    Objecting to a decision

    If you are dissatisfied with a decision affecting your liability to tax or an assessment, you may have the right to object. Please see information relating to the objection and review process.

     

    Your privacy

    Confidentiality provisions in the legislation bind all Office of State Revenue employees, and information gathered during audits/investigations is treated in the strictest confidence and will not be used or divulged except for purposes required by law. The disclosure of information to third parties is prohibited except to certain authorised persons and agencies, including State and Federal revenue authorities.

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    Keeping records

    You must keep all relevant tax records to ensure you to meet your statutory obligations and are paying the correct amount of tax.  Records must be retained for at least 5 years after they were made or the transaction to which they relate is completed.

    Tax records constitute a record required under a taxation Act, regulation or under a special tax return arrangement. (Note: under a special tax arrangement, the records could determine another person’s tax liability.)

    If we check your returns, duty endorsed documents, claims or applications we may ask you to provide these records.

     

    Access to records

    Western Australia’s legislation authorises investigators to have full and free access to all premises, documents, books and other records that are required to determine your tax liabilities.  Records must be kept:

    • on paper, digitally or as part of a software program
    • in the English language or in some other form that can be readily converted into English
    • in Western Australia or be otherwise made available for investigators

    You are committing an offence and can be charged with a penalty if you:

    • fail to comply with the record keeping requirements
    • keep or make an entry in a tax record knowing that it is false or misleading in a material particular, or wilfully damage or destroy a tax record

     

    General and specific exemptions

    An exemption from the requirement to keep a tax record may be given by regulation or by a notice issued by the Commissioner.

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    Online Duties

    See information regarding Online Duties record keeping recommendations under a Special Tax Return Arrangement.

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