Find out how we detect non-compliance and what happens during an investigation.
Detection
We use sophisticated data-matching techniques to detect non-compliance. We use data from other government agencies, banks, utility companies and other parties involved in a transaction.
Each year, we improve our methods to keep our success rates high. We aim to focus on non-compliant customers and minimise any impact on those doing the right thing.
We also encourage the public to report suspected non-compliance. You can submit an anonymous tip-off.
Our Compliance Strategy outlines our methods in more detail. We report on the results we are achieving in our compliance statistics.
Tell us before we find out
If you disclose your tax liability before we discover it, the penalties and interest are less. You can submit a voluntary disclosure before or during an investigation. Greater concessions apply when you come forward before an investigation has started.
Investigations
We start investigations for many reasons, including:
- routine checks
- data matching
- specific legislative issues
- industry trends
- tip-offs.
The length of an investigation depends on how quickly and accurately you provide all relevant information. If you are being investigated, we will help you understand your rights and obligations under the law. You can choose to have a professional adviser represent you.
During an investigation
In most cases, an investigator will write to you to:
- let you know that you’ve been selected for an investigation
- explain the investigation process
- tell you what you must produce
- give you enough time to prepare your records
In some cases they may arrange an interview with you. They may also examine your records and make other enquiries to check your compliance with the relevant legislation. Investigators have a range of powers. While they vary according to the provisions of each Act, in general investigators are permitted to:
- gain access to buildings and property
- inspect, examine, copy and seize books, documents and records
- search premises
- require you to answer questions, provide information and give reasonable assistance.
Failure to comply can lead to increased penalties or prosecution.
What to expect
We act impartially and apply the law consistently to make fair and equitable decisions. If you are selected for an investigation, we will:
- explain why you were selected
- tell you how long the investigation is expected to take and give you enough time to provide your records
- keep your information confidential
- allow you to seek independent advice, including valuation evidence if required
- let you explain your tax issues and request reduced penalties and interest
- negotiate the time and place for an interview if required, confirmed in writing
- provide a receipt for any records taken from your office or home
- consider your cooperation when determining penalties and interest
- treat you professionally and courteously.
These expectations align with our Customer Service Charter.
Your obligations
During an investigation, we expect you to:
- be courteous, cooperative and honest
- tell us if you have made a mistake with your taxes and explain how and why it occurred
- provide quick and complete access to all relevant information, documents, data, systems and personnel
- respond to our requests for information in a timely, accurate and complete manner
- work with us to resolve your tax obligations effectively
- provide reasonable assistance and access to the investigator.
At the end of an investigation
The investigator will provide you with written advice about the outcome and any proposed actions. You can:
- expect an explanation of the results or findings
- ask how penalties and interest were applied
- request advice about the objections and appeal process
- discuss any aspect of the case with us
- participate in a feedback survey, helping us improve our processes and voluntary compliance.
Penalty tax and interest
Your cooperation with an investigation can reduce penalties and interest. Failure to provide information or providing false information can increase penalties. Learn more about how penalty tax and interest is applied.
If you obstruct or hinder and investigation, your liability may be estimated. To correct this, you will need to go through the objection process and provide all relevant information to prove your case.
Objections and appeals
You must pay an assessment even if you lodge an objection. Interest will accrue on unpaid assessments. Where permitted, we may place a charge on your property or start recovery proceedings to safeguard the collection of the tax.
If you disagree with a decision or assessment, you can lodge a formal written objection. You have 60 days from the date of the assessment or decision to lodge an objection. Objections are handled by staff who are independent of the investigator. Read more about lodging an objection.
