KEITH KENDALL OWEN DIXON CHAMBERS EAST 30 OCTOBER 2012 The Audit

Outline Commencement of audit Provision of information Provision of documents Oral interviews The interview ATO response

Commencement of audit Review v audit Sections 263 and 264 ITAA 1936 May be for a period of years Topics  General  Specific (more frequent now) Accountants – often first point of call

Provision of information Documentary Oral Informal Formal (eg s 264)

Provision of information Privileges  Legal professional privilege  Dominant purpose  Careful – waiver (problem with non-lawyer as first adviser)  Accountant’s concession  Similar to LPP  More limited  Privilege against self-incrimination  Doesn’t apply (De Vonk; Binetter)

Provision of documents View all documents Privilege to claim?  Once waived, always waived May request specific documents  Often transaction based

Provision of documents Have explanation ready  Need to put into context  Opportunity to explain client actions  Ensures exercise meaningful Maintain copies  Keep track of sources  Where has ATO got documents from earlier?  May indicate who else has been interviewed

The interview Fact finding exercise for ATO Not a general conversation Records and outcomes of interview relevant to subsequent proceedings Make sure interview is controlled

Oral interviews Informal or formal (on oath) ATO often retains counsel  Prepare client as if in litigation Consider whether client wants counsel present too

Preparation Prepare client for likely questions  Especially obvious ones  Guards against client saying something detrimental unintentionally Have explanations ready Ensure you (as legal adviser) have viewed documents  Make sure these are presented in proper context  Assert any relevant privilege

During interview Listen actively  Stop objectionable questions  Eg based on false premise  Prevent disclosure of protected documents  LPP  Accountant’s concession Don’t let client talk unreservedly  Answer questions directly and that’s it  Resist temptation to fill in silences

During interview Present material in proper context  Meaningful fact finding exercise  Minimise misinterpretation  May cause difficulties later on

ATO response No action Draft position paper  Last chance to put client position before assessment  Submissions re facts and law  Evidence supporting contentions  Onus of proof (taxpayer)