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The Australian Taxation Office has released the final Legal Professional Privilege protocol to help with making claims to a formal information-gathering notice.
The protocol comes after extensive consultation with key stakeholders.
The ATO advised that when it undertakes investigations, it seeks to ensure it is provided with information to which it is legally entitled. It states that it can’t compel the provision of information that is properly subject to LPP.
When it issues a formal notice, it needs sufficient information so it can decide whether to accept, review or challenge a claim of LPP.
The ATO said it has seen instances where LPP has been inappropriately asserted in an attempt to withhold information and states that this hinders its investigative functions and can result in extended disputes about information gathering, instead of focusing on resolution of the issue.
The ATO’s response to this feedback is documented in the compendium.
The protocol outlines:
a recommended approach for assessing whether LPP applies
what we recommend you provide to us
what to expect from us when you make a claim.
The protocol is relevant to taxpayers claiming LPP when responding to formal notices. This will typically be large businesses that have received a notice as part of a dispute or audit activity. The vast bulk of our engagements in the large market are done without using formal information gathering powers.
The protocol covers all LPP claims, whether made by legal or non-legal practitioners regardless of the firm or business structure.
It is voluntary to follow the protocol, but following it should help us to decide quickly how to treat your claim. If you choose not to follow the protocol, we recommend you explain to us where you have not done so and why. If you do not provide this information and we do not have sufficient information to make a decision on a claim, we are likely to make further enquiries.