A taxpayer has a right to freedom of information (“FOI”) to access tax office records about the taxpayer a commissioner of taxation has used to raise, or prepared in raising, a tax assessment.
Will FOI be useful in this case?
This inexpensive right to FOI is worth using if the information that can be obtained is useful. That said, useful information or evidence is not to be had with FOI about every unwelcome assessment. Of itself, applying for FOI doesn’t offer any tactical advantage in succeeding on a tax objection. Do not always expect that the commissioner has made some mistake by identifying tax owing which the taxpayer did not expect and, even if there is a mistake by a tax officer apparent in the documents released on a FOI initiative, that mistake might not aid the case of the taxpayer.
Has the assessment been poorly or inadequately explained?
FOI is most likely to be useful in exceptional cases where the assessment has been poorly or inadequately explained to the taxpayer. An explanation may be:
- in what is said or given to the taxpayer and his or her tax agent;
- in the notice of assessment or in the paperwork with it; or
- made during the course of a tax investigation.
Has a tax officer acted strangely?
In some cases there may be a suggestion or suspicion that a tax officer may have acted oddly in relation to the tax affairs of the taxpayer. It may be useful to know more about that from FOI.
Adequacy of information given about the disputed assessment
More often the taxpayer and the tax agent will have been given enough before and with the assessment to understand the commissioner’s reasoning behind the increase in tax owing by the taxpayer in the assessment (even if they do not appreciate it).
If there has simply been an omission in documents received with the assessment, a “copies of tax documents” request (which is quicker and less confrontational that a FOI request) may suffice.
Careful review of these communications and analysis of the assessment will usually be sufficient to reveal the broad reasoning of the commissioner and the nub of the dispute with the commissioner without recourse to FOI.
Objecting within time is generally more important
Objecting on time, rather than including revelations from FOI in the notice of objection, will be the greater imperative. Useful information, if any, from a FOI request may not become available for a number of months following an application for FOI so, if a FOI application is to be made, it may need to be made early if it is be used to help formulate a tax objection before it is due.
Identify when more information is really needed from the commissioner of taxation
FOI could be needed in the case of a default assessment of income tax to understand the conclusions behind the notional “return” of income which the commissioner has prepared instead of or in addition to a copies of tax documents request.