Audits and Investigations
State Revenue conducts audits and investigations into the operations of taxpayers to ensure compliance with the legislation administered and to assess any risks that may impact on compliance.
This page is provided to help you understand the audit and investigation process, provide answers to some questions you may have and outline your rights and obligations during the audit process.
Investigations are selected in a variety of ways, including:
- Follow-up of information received from external sources
- Projects designed to target specific problems or issues in legislation
- Industry trend analysis
- Information from members of the public
- Routine verification and coverage of tax base.
In most cases an investigator will:
- Write, telephone or visit you to let you know that an investigation will be conducted
- Explain the process and the scope of the 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 or investigation
- Confirm arrangements in writing.
At the commencement of the investigation, the Investigator will present to you his or her identification and authority.
During an investigation, the Investigator will conduct interviews and make enquiries to establish your compliance with the particular legislation and examine and test some of your internal records.
You will be advised of the outcome of the investigation and any proposed action.
You should ensure that the records the Investigator has requested are ready for examination. If you require further time to collate the records, please inform the Investigator prior to the commencement of the audit.
How long an investigation takes depends to a large extent on the information you provide, for example, how quickly the information is provided and how accurate and comprehensive the information 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 understand the issues involved.
However, for interviews about subcontractor determinations the Commissioner will allow only the subcontractors representative to be in attendance.
If you have any questions about the arrangements for the investigation or the processes involved, contact the Investigator for assistance.
Investigators have a range of powers, which can vary according to the provisions of the Taxation Administration Act 2003. In general, these powers permit the Investigator to:
- Gain access to buildings and property and remain there
- Inspect, examine, copy and seize books, documents or records
- Search premises
- Require a person to answer questions and provide information
- Require a person to give reasonable assistance.
If a taxpayer fails to comply with an Investigator’s lawful requests, a prosecution may result.
During an investigation, you are obliged 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.
If an investigation is to be conducted, you have the right to:
- ask for reasonable time to produce your records
- negotiate the time and place for the investigation with the Investigator
- receive written confirmation of those arrangements.
During an 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 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 office
- be given the opportunity to explain the reasons for irregularities, discrepancies, decisions etc.
At the end of an 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 case with the Investigator or his or her manager.
Penalties will generally apply if tax or duty has not been paid or has been underpaid.
Details of the penalties applicable can be found on the following Commissioners Practices:
An objection may be made at no cost and will be responded to within 90 days of receiving all relevant information. A senior officer, independent of the original decision maker and Compliance Division, will review the assessment and determine your objection. A written response will be provided outlining the reasons for the decision.
Where an objection is allowed, wholly or in part, a refund of the overpayment, together with interest, will be provided where appropriate.
Should you have concerns regarding the process surrounding an objection, you may contact the Office of State Revenue (OSR) for advice on the options available to you.
Please be aware that OSR must receive a written objection within 60 days of the assessment being issued. Where an objection is pending the assessment remains payable by the due date, unless otherwise notified.
Where you are dissatisfied with the outcome of an objection, you have the right to appeal the decision via the State Administrative Tribunal or the Supreme Court.
Legislative secrecy provisions bind all Office of State Revenue employees.
Information gathered during investigations is treated in the strictest confidence and will not be used or divulged except for purposes required by law.
The Taxation Administration Act 2003 prohibits disclosure of information except to certain authorised persons and agencies, including State and Federal revenue authorities.