In a recent and possibly disturbing case for many taxpayers, the ATO has been able to gain access to family court documents in relation to a taxpayer who was already under investigation.

Facts

A husband and wife were parties to proceedings in the Family Court of Australia which was dismissed by consent in December 2010. The dismissal occurred after the ATO had started an audit of the husband and his related entities in June 2009 in relation to the 1991 to 2010 income years.

In November 2009, the ATO wrote to the Court seeking access to documents in “a current proceeding” and subsequently requested access to certain affidavits, financial statements, subpoenas and other documents. After much to-ing and fro-ing, the matter came before the Full Court of the Family Court which decided in the ATO’s favour.

Decision

Basically, the Court decided in favour of the ATO because:

• it was engaged in a substantial, targeted audit – not a “random audit”; and
• without the documents, the history and details of assets that had been acquired, many outside Australia, would only be available in the unlikely event that the taxpayers co-operated with the audit.

* * * Disclaimer: The information is sourced from NTAA. * * *
Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their circumstances.