We have various formal powers to gather information for the purposes of the laws we administer. These powers recognise that in most cases the information we need to establish a proper liability resides with taxpayers and third parties.
Although we have notice and access powers, the approach most often used is to consult with you to cooperatively obtain the information. Requesting information in this way usually results in the production of the information we need or advice on how we can obtain the information.
If we cannot obtain the information this way, we may use our notice and access powers. In some cases, we may also use these powers at the outset – for example, in cases involving tax avoidance schemes, or where you request us to take a formal approach.
Information gathering explained
Australian tax and superannuation laws require you to keep records as evidence to support your claims. These records include documents that evidence an intention, election, choice, estimate, determination or calculation. For these purposes, documents include computer files and other electronic information.
Effective information gathering is important to the quality of our compliance activity outcomes. We plan our information-gathering activities to satisfy evidentiary requirements. Planning also helps us to manage our compliance activities, ensures good communication and promotes the timely completion of those activities.
The situations when a formal approach to information gathering may be used include:
- risk management
- risk to our revenue collection
- litigation risk – to establish probative value of evidence
- high-risk issues
- international issues and complex structures
- behavioural issues.
- targeted collection based on hypotheses to
- manage the level and volume of evidence required
- get to the full facts quickly
- be in the same factual position as you.
- to ensure our resources are used efficiently when gathering information.
Our information gathering cycle
In our information gathering cycle we decide what information we need to make evidence-based decisions.
We decide whether to gather the information using a cooperative approach, or alternatively using our formal powers.
If we use a cooperative approach we continually assess if this is satisfactory, and if necessary will change to a formal approach.
After we’ve gathered the information we determine if it is sufficient, or if more information is needed to support our decisions. If it is sufficient, our information gathering is complete. If not, we return to the client with our request for additional information. This process is shown in figure 1 below.
Figure 1 Our information-gathering cycle
For more information about record keeping, see Record keeping for business and Records you need to keep for individuals.
For more about penalties imposed for failure to keep or retain records, refer to PS LA 2005/2 - Penalty for failure to keep or retain records.