Section 263 powers of access - why settle for second-best?
Source: Australian Tax Forum Journal Article
Published Date: 1 Jul 2005
Sec 263 ITAA has been an important part of the federal income tax legislation for more than 60 years, and is the main investigative provision on which the ATO regularly relies, providing a statutory power of access to (broadly) records and buildings. It is therefore surprising to find that sec 263 has a number of well-known deficiencies that have not been addressed by the few amendments made to the section.
As a result, sec 263 is currently a “second-best” provision, often relying on common law principles whose content and application to the section are disputed or unclear, and which sometimes after decades of case-law still do not provide definitive “rules”. The doctrine of legal professional privilege is a classic illustration of this aspect of Eisenstien’s “hazards of litigation”.
This article suggests that fundamental reform to sec 263 is long overdue, and that it would be comparatively simple to draw upon existing precedents from other legislation within Australia or overseas jurisdictions to remedy defects in sec 263, and thus provide clear rules and guidelines in a crucial area. A variety of possible approaches which might be taken are set out or referred to in the article, any of which would – in different ways – improve the current section.
It is sometimes suggested that there is no need to amend sec 263 because issues arise relatively infrequently. Perhaps – but when disputes do arise, the ensuing litigation can tie up years of taxpayers’, government’s and legal advisers’ time and expertise, and may cost millions of dollars in money and lost opportunities – often to resolve an issue which could easily have been avoided by clear legislative drafting!
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Details
- Published By: Prof Robin H Woellner CTA
- Published On:1 Jul 2005
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