Commonwealth and Taxation Ombudsman Professor John McMillan today confirmed that the Australian Taxation Office (ATO) had established appropriate procedures for exercising its coercive ‘access without notice’ powers.

The wide–ranging powers allow the ATO to enter a business or private premises without the owner’s permission to examine and copy documents, relevant to an investigation, that deal with income, indirect, pay as you go, fringe benefits and energy–related taxes and superannuation.

Professor McMillan made his findings following a random audit in 2009 that included observing a coordinated, simultaneous multi–site access without notice visit in several states and a thorough review of various files and other documentation.

‘The ATO takes the use of its access without notice powers seriously and has established a set of sound guidelines and manuals to assist its staff to apply the powers,’ Professor McMillan said.

‘It’s pleasing to note also that the ATO’s activities generally comply with the principles outlined in the Administrative Review Council’s report The Coercive Information–gathering Powers of Government Agencies and the Ombudsman’s Lessons for public administration.

‘This is the second Ombudsman investigation into the ATO’s access without notice powers in the past 10 years and it confirms that taxpayers can feel confident that the ATO is exercising these powers in the manner in which it should.’

Professor McMillan said it was right and proper that the ATO used its access without notice powers only in exceptional circumstances, defined by a genuine belief that documents might be destroyed if notice was given, a well–founded concern that fraud or evasion was occurring, or inappropriate secrecy by the taxpayer.

However, he suggested—and the ATO agreed—that the ATO’s commitment to public accountability would be strengthened by:

Download the report: 02|2010 — Australian Taxation Office: Use of ‘access without notice’ powers, February 2010

Media contact: Media 02 6276 3759

Date of release: 15 February 2010

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      15 Feb 2010: ATO surprise visits get tick of approval

      Commonwealth and Taxation Ombudsman Professor John McMillan today confirmed that the Australian Taxation Office (ATO) had established appropriate procedures for exercising its coercive ‘access without notice’ powers.

      The wide–ranging powers allow the ATO to enter a business or private premises without the owner’s permission to examine and copy documents, relevant to an investigation, that deal with income, indirect, pay as you go, fringe benefits and energy–related taxes and superannuation.

      Professor McMillan made his findings following a random audit in 2009 that included observing a coordinated, simultaneous multi–site access without notice visit in several states and a thorough review of various files and other documentation.

      ‘The ATO takes the use of its access without notice powers seriously and has established a set of sound guidelines and manuals to assist its staff to apply the powers,’ Professor McMillan said.

      ‘It’s pleasing to note also that the ATO’s activities generally comply with the principles outlined in the Administrative Review Council’s report The Coercive Information–gathering Powers of Government Agencies and the Ombudsman’s Lessons for public administration.

      ‘This is the second Ombudsman investigation into the ATO’s access without notice powers in the past 10 years and it confirms that taxpayers can feel confident that the ATO is exercising these powers in the manner in which it should.’

      Professor McMillan said it was right and proper that the ATO used its access without notice powers only in exceptional circumstances, defined by a genuine belief that documents might be destroyed if notice was given, a well–founded concern that fraud or evasion was occurring, or inappropriate secrecy by the taxpayer.

      However, he suggested—and the ATO agreed—that the ATO’s commitment to public accountability would be strengthened by:

      • greater transparency through, for example, reporting use of the powers in its annual report
      • finetuning the Access and Information Gathering Manual, especially in relation to the ATO’s excisable goods regulatory role
      • improving the electronic case management filing system.

      Download the report: 02|2010 — Australian Taxation Office: Use of ‘access without notice’ powers, February 2010

      Media contact: Media 02 6276 3759

      Date of release: 15 February 2010