The AAT has refused to direct the ATO to produce external legal advice quoted in an audit report. Prompted by a referral from the Criminal Assets Confiscation Taskforce (Confiscation Taskforce), the ATO conducted a covert audit of the taxpayer. This resulted in amended assessments for the 2006-2009 and the 2011-2013 income years being issued. In these proceedings, the taxpayer applied for a direction that the ATO produce external legal advice quoted, in the audit report, and various documents provided by the Confiscation Taskforce and the Australian Crime Commission (the Crime Commission), which seemingly were used in making the amended assessments.
The AAT refused to direct that the legal advice be produced on the basis that the subjective opinions of counsel were not relevant in relation to issues that have to be resolved having regard to the objective facts, such as whether the taxpayer’s position was reasonably arguable (relevant in relation to shortfall penalties). Nor were those opinions relevant in relation to matters such as the quality of the evidence, the credit of witnesses and whether there was fraud or evasion (relevant to the validity of the 2006-2009 amended assessments).
As regards the Confiscation Taskforce/Crime Commission documents, although they did not appear to be relevant, the AAT adjourned the proceedings so that the ATO and the ACC could make submissions as to whether there were statutory limits on the ability of the ATO to disseminate documents or whether public interest immunity might arise.
(FYMS v CofT [2022] AATA 3790, AAT, McCabe DP, 9 November 2022.) [LTN 217, 14/11/22]