ATO section 353-10 notices and access powers

A section 353-10 notice is a formal written notice from the ATO that legally requires you to give information, attend an interview and give evidence, or produce documents (Taxation Administration Act 1953 (TAA), Sch 1 s 353-10). Unlike an informal request, it generally must be complied with, and failing to comply can be a criminal offence.

These notices, also called ATO information notices or formal notices, often arrive during an ATO review or audit, and the ATO also uses them when recovering tax debts.

What is a section 353-10 notice?

By written notice, the Commissioner can require you to do any or all of the following for the purpose of the administration or operation of a taxation law (Sch 1 s 353-10(1)):

• Give information, usually by answering written questions.
• Attend and give evidence before the Commissioner or an authorised officer, on oath or affirmation if required, orally or in writing (s 353-10(2)).
• Produce documents in your custody or under your control.

"Control" reaches further than people expect: the ATO's example is business partners who must produce documents their bank physically holds (ATO, Our formal notice powers, last updated 14 October 2024). The power replaced section 264 of the Income Tax Assessment Act 1936 (ITAA 1936), repealed in 2015, so older material refers to "section 264 notices".

Who can receive one?

Generally, anyone: you, or a third party who may have information about you, such as your bank, accountant, lawyer or customers. The ATO says that it will usually ask you first where you both hold the information, that a notice overrides a third party's contractual duty of confidentiality, and that if it suspects tax avoidance it may issue notices to third parties without telling you.

Is it a request or a formal notice?

The ATO says it usually issues a notice only after trying to get the information cooperatively, though sometimes it uses one first. Its reasons include wanting evidence on oath, a third party's duty of confidentiality, ignored or unsatisfactory earlier requests, and a risk that documents could be lost or destroyed.

The ATO says its notices will state the law they are issued under, what they require, why it needs the information, and when and where to comply (ATO, Our formal notice powers). If a letter doesn't name a power, ask whether it is a request or a notice.

How long do you have to comply with an ATO notice?

The notice sets the date. The ATO says it generally gives 28 days, though sometimes more for large volumes and sometimes less, for example after earlier non-compliance. It says it will allow time to get advice on privilege and the accountants' concession.

If you can't meet the date, ask for more time in writing as early as possible, saying why and when you can comply. If the ATO agrees, it usually withdraws the notice and issues a new one with a later date. Until you have the new date in writing, work to the date you have. A refusal can be escalated to a senior officer.

What happens if you don't comply?

Refusing or failing to comply with a notice is an offence (TAA s 8C(1)). It is an absolute liability offence, so the prosecution doesn't have to prove you meant to ignore the notice (s 8C(1A)), but it doesn't apply to the extent you can't comply (s 8C(1B)). Refusing to answer a question, produce a document or take an oath or affirmation at an interview is a separate offence (s 8D).

Maximum penalties are set in penalty units (s 8E). An earlier conviction generally counts only if it was within the previous 5 years (s 8B(2)):

Situation	Maximum penalty
No earlier conviction for a relevant offence	20 penalty units
An earlier conviction for a relevant offence	40 penalty units
Two or more earlier convictions (for an individual, only if the Commissioner has elected under s 8F)	50 penalty units, 12 months' imprisonment, or both
Breaching a court order to comply (s 8H)	50 penalty units, 12 months' imprisonment, or both

For a company, the court can generally impose a fine of up to five times these amounts (Crimes Act 1914 s 4B(3)). On conviction, the court can also order you to comply even though the deadline has passed (s 8G) and, if a purpose of the refusal was to help avoid tax, order you to pay the Commissioner up to twice the tax involved, or three times for a repeat offence (s 8HA).

A false or misleading statement to the ATO in a material particular is a separate offence (s 8K). Taking steps to stop the ATO finding out about a shortfall increases the base penalty amount for it by 20% (Sch 1 s 284-220(1)(a)). See ATO penalties and penalty remission.

Once you know the ATO is looking at your affairs, don't destroy, alter or move records. The ATO warns that destroying documents may be an offence, and it can make every later step of the dispute harder.

Can you challenge an ATO notice?

A notice must be issued for the purpose of the administration or operation of a taxation law. The ATO says a decision to issue a notice, or to refuse an extension, can be reviewed by the Federal Court under the Administrative Decisions (Judicial Review) Act 1977 (ADJR Act), and that you can ask for a statement of reasons under section 13 of that Act. The Federal Court has treated issuing a s 353-10 notice as a decision for those purposes (Nelson v Commissioner of Taxation [2017] FCA 819 at [27]). Review may also be sought under s 39B of the Judiciary Act 1903. Judicial review asks whether the power was lawfully used, not whether the notice is inconvenient. Time is short: an ADJR application generally has to be lodged within 28 days after you receive the decision or, if you asked for one, the statement of reasons, unless the court extends time (ADJR Act s 11(1)(c), (3)).

If a notice is vague, the ATO expects you to respond anyway and ask the case officer to clarify it. If it concerns matters already before a court, tell the ATO in writing: it says it will withdraw a notice it considers could be in contempt of court. In its view, a dispute before the Administrative Review Tribunal usually doesn't stop it issuing one.

You can't refuse to comply by relying on the privilege against self-incrimination. The Full Federal Court has held that the privilege was abrogated for notices under the former s 264 (Binetter v Deputy Commissioner of Taxation [2012] FCAFC 126 at [30]), and the Federal Court has applied that to s 353-10 (Deputy Commissioner of Taxation v Shi (No 3) [2019] FCA 945 at [32]–[34]). On appeal in Shi, Davies J agreed, adding that s 353-10 places no limit on how incriminating information obtained under a notice can be used (Deputy Commissioner of Taxation v Shi [2020] FCAFC 100 at [24]). The appeal itself turned on a different issue, which the High Court later decided ([2021] HCA 22). The ATO says its policy is not to use notices to gather evidence for a prosecution, but that information obtained under a notice may be used as evidence in one, for example if you make a false or misleading statement. Once charges are pending, the courts have restrained compulsory questioning about the same matters as a possible contempt of court (as discussed in Deputy Commissioner of Taxation v Shi (No 3) [2019] FCA 945 at [36]–[40]). If a criminal investigation is possible, get legal advice before you answer questions or attend an interview. See tax evasion and ATO fraud investigations.

ATO access powers: can the ATO enter your premises?

Yes. For the purposes of a taxation law, the Commissioner or an authorised officer may, at all reasonable times (Sch 1 s 353-15(1)):

• enter and remain on any land, premises or place,
• have full and free access to any documents, goods or other property,
• inspect, examine, copy or take extracts from documents, and
• inspect, test or take samples of goods or property.

The section doesn't require advance notice. The ATO says it generally gives prior notice, but may not in exceptional circumstances, such as suspected fraud or evasion or a belief that documents may be destroyed. It says officers can copy documents but can't seize or remove them without your consent (ATO, Our formal access powers, last updated 1 May 2024).

An authorised officer isn't entitled to enter or remain if the occupier asks for proof of authority and the officer doesn't produce an authority signed by the Commissioner (s 353-15(2)). The occupier must give all reasonable facilities and assistance, and failing to is an offence with a maximum penalty of 30 penalty units (s 353-15(3)).

If officers arrive, ask to see the signed authority, contact your lawyer and say straight away which material you claim is privileged. The ATO says it may seal disputed documents while a claim is resolved, and won't argue privilege was waived because it looked at documents to check relevance, or because nobody was present to claim privilege or a blanket claim was made (ATO, Limits to our formal powers, last updated 1 May 2024).

Legal professional privilege and ATO notices

Documents protected by legal professional privilege are exempt from production under statutory powers such as an ATO notice (Glencore International AG v Commissioner of Taxation [2019] HCA 26 at [5]).

Privilege protects confidential communications between you and your lawyer made for the dominant purpose of giving or getting legal advice, or for actual or reasonably anticipated litigation. The person claiming privilege must establish it. The ATO's guidance notes that privilege generally doesn't cover:

• documents that record a transaction, such as contracts, conveyances or trust deeds,
• communications made to further an illegal or improper purpose,
• documents where privilege has been waived, expressly or by conduct, and
• an accountant's advice prepared for its own purpose, even if later sent to a lawyer for comment.

Labels and engagement structures don't decide the question. In Commissioner of Taxation v PricewaterhouseCoopers [2022] FCA 278, which arose from ATO notices to a partner of a multi-disciplinary firm and to its client, the court rejected the Commissioner's broad argument that no lawyer-client relationship existed, then looked at each document. Of 116 sample documents, it found 49 privileged, 6 partly privileged and 61 not, often because the communication failed the dominant purpose test (at [20]–[23]).

Privilege is an immunity from compelled disclosure, not a right you can sue on, so it doesn't by itself let you recover privileged documents the ATO has already obtained another way (Glencore at [12]).

How to claim privilege

The ATO publishes a legal professional privilege protocol and claim forms. The protocol is voluntary, but the ATO expects enough explanation to decide whether to accept or challenge each claim. A partly privileged document is produced with the privileged part redacted. Where its guidance is followed, the ATO says it won't draw an adverse inference merely because you claim privilege.

If a disputed claim can't be resolved within a reasonable time, the ATO may notify you that the documents may be accessed within 28 days unless you start legal proceedings, or it may go to court itself, as in the PwC case. Treat that letter as urgent: the 28 days is your window to go to court.

What is the accountants' concession?

The accountants' concession is administrative, not a legal right. Under it, the ATO generally won't seek access to certain advice papers prepared by your independent, external accounting adviser:

Type of document	Examples	ATO approach
Source documents	Ledgers, tax working papers, contracts, trust deeds, client lists	Unrestricted access
Restricted source documents	Advice on how to structure or record a transaction that was carried out	Only in exceptional circumstances
Non-source documents	Advice given after a transaction, advice on proposals never put into effect, current audit files	Only in exceptional circumstances

A designated senior officer must approve lifting the concession. The ATO's examples of exceptional circumstances include where it can't otherwise work out the tax consequences, where the law requires it to determine the purpose of an arrangement (such as under Part IVA), a reasonable suspicion of fraud or evasion, and a risk that source documents may be lost or destroyed.

The concession is narrower than privilege. It doesn't protect your request for advice or your instructions, allow part of a document to be redacted, or cover documents prepared for non-tax purposes, and it is lost if you give the documents to the ATO. Where both are claimed, privilege is generally considered first. Accountants with a notice about a client can see how we work with accountants.

What is an offshore information notice?

An offshore information notice requests information or documents outside Australia (or copies of them) that the ATO reasonably believes are relevant to assessing your own tax-related liability (Sch 1 s 353-25(1)). It must allow at least 90 days after it is given to you. You can apply for an extension in the approved form, but only before the period ends. If the ATO hasn't told you its decision by then, the period runs on until it does (s 353-25(2)–(4)). The rule was previously in s 264A of the ITAA 1936.

Not complying with the offshore request isn't an offence under s 8C (s 353-30(1)). But the request can be in the same document as a section 353-10 notice (s 353-25(2)(d)), and any section 353-10 requirement in it is still compulsory, so check which parts are which.

If you don't comply, even because you can't, the information and documents are not admissible in a review or appeal of an objection decision about that liability (TAA Part IVC) unless the Commissioner consents (s 353-30(2)). In deciding, the Commissioner can't take into account the consequences of a foreign secrecy law, and must consent if refusing would make the tax or penalty incontestable (s 353-30(3)). That can decide a later dispute in the Administrative Review Tribunal or Federal Court (see challenging an objection decision).

How we help with ATO notices

• Check the notice: which power it uses, what it requires and your deadline.
• Scope and timing: clarifying requests, staged production and extensions.
• Privilege and concession claims: reviewing the documents and preparing the claims.
• Interviews: preparing you and attending with you.
• Your accountant: we work alongside them on the response.

Next step

Send us the notice (every page) with any covering letter, the ATO's earlier requests and your replies, and a short note of where the records are and who holds them, including your accountant and any lawyers who have advised you. If an interview or site visit is booked, tell us the date. In a first call we'll confirm your deadline, what the notice requires and which documents may need a privilege or concession claim.