Audits

In most cases, the auditor will telephone you to:

• arrange a time and place for an initial interview
• explain the audit process
• advise you which records will be inspected
• give you an indication of how long the audit will take.

The auditor will usually allow a reasonable time for you to prepare records and will confirm these arrangements in writing.

You should:

• take note of the name and telephone number of the auditor
• make sure you understand which records we need to see
• review the records before the auditor arrives to see if you have made any unintentional errors.

A voluntary disclosure to the auditor will save time and generally result in a lesser penalty.

You may wish to seek professional advice if you are dealing with complex matters.

Our auditors have the authority to:

• require you to provide documents (unless they are subject to a valid claim for legal professional privilege)
• require you to provide information about matters within your knowledge
• enter public places and places of business during their normal opening hours
• enter residential premises with consent (or a warrant)
• inspect, copy and seize documents and things.

Generally, we will work with you to receive the correct information without needing to exercise our powers.

 

Before the audit

You have the right to ask the auditor:

• for a reasonable time to produce your records
• about the time and place for the audit
• to provide a letter confirming the audit arrangements.

During the audit

During the audit, we will normally interview you and examine your records to see if they comply with the revenue laws. Any information we obtain through an audit is treated confidentially—it will only be disclosed for limited purposes prescribed by law. 

You have the right to:

• see the auditing officer’s identification
• involve your accountant or legal advisor in the audit process
• professional and courteous conduct from the auditor
• be asked unambiguous questions
• ask how long the audit will take
• receive a copy of any formal record of interview
• receive a receipt for any records taken away from your office.

After the audit

You have the right to:

• receive a full explanation of any adjustments made as a result of the audit
• explain reasons for any irregularities or issues
• receive an explanation of how and why any penalties and interest have been applied
• discuss the audit with the auditor’s supervisor.

You also have a statutory right to:

• expect your affairs to be treated confidentially
• object and appeal.

Penalty tax

In certain circumstances, penalty tax will apply at a rate of 75%. Unpaid tax interest (UTI) may also apply.

For more information about when we will remit penalty tax, see the following Public Rulings:

• TAA060.2—Penalty tax
• TAA060.3—Penalty tax—home concessions.

Cancellation or suspension of registration

Under section 469A of the Duties Act 2001, the Commissioner may suspend a self assessor’s registration immediately where:

• grounds for suspension and cancellation exist

and

• the Commissioner believes it is necessary to protect the integrity of the self assessment system—OSRconnect

or

• the Commissioner believes there is an unacceptable risk the self assessor will not comply with an obligation under the Duties Act or the Taxation Administration Act 2001.

Further information

Ask your auditor or contact us on 1300 300 734.