The Investigation Process
Information for Taxpayers and Clients

RevenueSA conducts investigations into the operations of taxpayers to monitor and address risks associated with compliance with South Australia’s taxation legislation.

This information is provided to help you understand the investigation process and answer some questions you may have. It also provides you with some details of your rights and obligations during an investigation.

How are cases selected for investigation?
What happens when you are selected for investigation?
How do I prepare for an investigation?
What are the Investigator’s powers?
What are my obligations?
What are my rights?
What are the penalty tax and interest provisions?
Can I object or appeal against a decision or assessment?
What about my Privacy?

How are cases selected for investigation?

Investigations are selected in a variety of ways:-

• Projects designed to target specific problems or issues in legislation;
• Random selection;
• Industry trend analysis;
• Tip offs;
• Follow-up of information received from a variety of sources; and
• Routine verification and coverage of tax base.

What happens when you are selected for investigation?

In most cases an investigator will: -

• Write, telephone or visit you to let you know that an investigation will be conducted;
• Explain the process and the scope of the investigation;
• Specify the records to be produced;
• Give you a reasonable period to assemble those records;
• Arrange a time and place to interview you or your representative; and
• Confirm arrangements in writing.

At the commencement of the investigation, the investigator will present to you his or her identification and authority.

During an investigation, the investigator will conduct interviews and make enquiries to establish your compliance with the particular legislation and examine and test some of your internal records.

You will receive written advice of the outcome of the investigation and any proposed action.

How do I prepare for an investigation?

You should ensure that the records the investigator has requested are ready for examination. If you require further time to collate the records, please inform the investigator prior to the commencement of the audit.

If you discover any discrepancies or undeclared tax liabilities and voluntarily tell the investigator about them before the interview, penalties may be reduced.

How long an investigation takes depends to a large extent on the information you provide, for example, how quickly the information is provided and how accurate and comprehensive the information is.

When dealing with complex matters, you may wish to ask your legal or financial representative for advice. We encourage you to do this if it helps you understand the issues involved.

If you have any questions about the arrangements for the investigation or the processes involved, contact the investigator for assistance.

What are the Investigator’s powers?

Investigators have a range of powers, which can vary according to the provisions of each Act administered by RevenueSA. In general, these powers permit the investigator to:–

• Gain access to buildings and property and remain there;
• Inspect, examine, copy and seize books, documents or records;
• Search premises;
• Require a person to answer questions and provide information; and
• Require a person to give reasonable assistance.

If a taxpayer fails to comply with an investigator’s lawful requests, it is possible that a prosecution might result.  Furthermore, this action may have a bearing on the determination of the taxpayer culpability in the matter relevant to the level of penalty involved or any decision made about the remission or partial remission of penalty.

What are my obligations?

During an investigation, you are obliged to provide:–

• The investigator reasonable assistance and facilities;
• Complete and honest answers and explanations to questions; and
• Prompt, full and free access to all relevant information, records, documents, data and systems as required.

What are my rights?

If an investigation is to be conducted, you have the right to:-

• Ask for reasonable time to produce your records;
• Negotiate the time and place for the investigation with the investigator; and
• Receive written confirmation of those arrangements.

During an investigation, you have the right to:–

• Sight the investigator’s identification and authority;
• Expect the investigator to be professional and courteous;
• Involve your professional representative in the process;
• Ask how long the investigation will take;
• Expect your affairs to be treated with strict confidentiality;
• Obtain a receipt for records or other material the investigator removes from your Office; and
• Be given the opportunity to explain the reasons for irregularities, discrepancies, decisions etc.

At the end of an investigation, you have a right to:–

• Receive an explanation of the results or findings;
• Ask the investigator how any penalty tax and interest provisions have been applied;
• Ask for advice about the objection and appeal process; and
• Discuss any aspect of your case with the investigator or his or her manager.

What are the penalty tax and interest provisions?

Penalty tax will generally apply if tax or duty has not been paid or has been underpaid.

The amount of the penalty tax depends on the level of culpability and can range from 25% (or lower) where the taxpayer has taken reasonable care to comply, through to 75% of the unpaid tax where a taxpayer has deliberately tried to evade payment of tax. Factors that influence the level of penalty tax include voluntary disclosure of any underpayment or non-payment of tax before the investigation commences, or hindering or obstructing the investigation.

Details may differ slightly depending on the type of tax or duty involved and on individual circumstances, so you should ask the investigator for specific information relevant to your case.

Further information is available in Circular 281.

Can I object or appeal against a decision or assessment?

If you are dissatisfied with certain decisions or an assessment, you are entitled to lodge a formal written notice of objection with the Minister. You have 60 days from the date of the assessment to lodge an objection. 

Lodging an objection does not cancel the liability to pay an outstanding amount.  If taxes or duty remain unpaid, interest will accrue. If you are dissatisfied with the outcome of an objection, you may take the matter further by appealing to the Supreme Court within 60 days of the Minister’s determination. 

What about my Privacy?

Legislative secrecy provisions bind all RevenueSA employees. Information gathered during investigations is treated in the strictest confidence and will not be used or divulged except for purposes required by law.

This page was last reviewed 24 September, 2007