The 'Audit' Power of the Commissioner of Taxation: Sections 263 and 264 of the Income Tax Assessment Act 1936

Abstract

The introduction of self-assessment has sparked an increase in what is termed 'auditing' by the Australian Taxation Office. The emphasis is now on the voluntary compliance of taxpayers encouraged by increased contact with taxation officers. This can occur at the Australian Taxation Office (ATO) and/or at a taxpayer's home or business premises. As a consequence, not only are a taxpayer's professional advisers often required to be involved but their own business premises may be subject to a 'visit' by taxation officers. It is therefore important that professional advisers have a good understanding of the extent and limitations of the Commissioner's investigative powers pursuant to the Income Tax Assessment Act 1936 (the Act). This is reinforced by the provisions of the Taxation Administration Act, 1953 (as amended) which provides for prosecution action upon failure to comply with a requirement under the Act.