Understanding your circumstances

Our information gathering helps us to understand your circumstances and activities.

If you own a business, we seek to develop our understanding of it by obtaining information, including:

• your business operations
• the business structure used and its ownership
• the influences on your business
• the industry it operates in
• the tax aspects of the business.

The information we need about you or your business varies. The level of understanding we require will differ according to the type of compliance activity we undertake and its stage of completion. We require a broad understanding for initial case selection or risk analysis and a greater level of understanding if you are subject to a risk review or audit.

The amount of information we need to complete a compliance activity will vary from case to case, depending on the complexity. To resolve issues and establish our position, we should have the same factual understanding as you or your decision makers.

We plan our timeframes and information-gathering approaches when conducting a risk review or audit to get the facts and obtain relevant supporting evidence. We aim to form our view and advise you of that position as soon as we can.

Risk reviews

We may seek information from you as part of a risk review. We may not be able to request specific information when we start as we may not know the exact tax issues in question.

The information needed for a risk review may cover a wide range of financial records, including a trial balance and supporting working papers. In some cases, we may need access to other records to properly assess the tax risk.

While conducting a risk review, we may ask for detailed information to help us gain a deeper understanding of your activities and determine whether a material tax risk exists. Once specific tax issues have been identified, we can then issue more targeted information requests.

Generally, we gather information to identify a risk or determine if no further action is required.

Audits

Audits are conducted to deal with identified risks. When compared to a risk review, an audit will involve more detailed verification of the facts to make sustainable decisions at law based on the evidence we have.

Audits are generally more comprehensive than risk reviews and involve an intensive examination. As such, during an audit, we may require a detailed level of information – for example, written contracts used in business dealings.

When collecting information for an audit, we will generally have more contact with you and spend time at your premises to examine documents, record your processes and discuss issues with key personnel. We need to gather sufficient information to either establish our view and support that position or determine that no further action is required.

Private rulings and objections

We generally use a cooperative approach to seek information in relation to private rulings requests.

We are likely to use our formal powers when seeking information to determine objections. This is often necessary because of the timeframes we work with and the fact that information may often be required as evidence for litigation.