Working the Enquiry: Opening Meeting: Approach
Generally speaking you should draw the taxpayer’s attention to any clear errors you have established from your initial examination of the records before inviting a disclosure, and you should also outline any more general areas of concern. Unless you are reasonably certain that there have been understatements - and often it will not be possible for you to be certain at this stage - you should ask the taxpayer in a neutral way whether there is anything further that he or she has to tell you, taking account of what you have said. You should make it clear that you are not making any allegations at this point.
Throughout the meeting you should bear in mind
- your objectives, and should avoid being steered away from them. There will be occasions when it is useful to let the taxpayer talk at length, but you should not allow him or her to ramble
- that you have asked for the meeting, and you are responsible for achieving your ends in a reasonable amount of time
- that it will be costly for the taxpayer especially if accompanied by an agent. However, you should not be intimidated by that fact - the cost will be much more if the enquiry drags on, especially if there has to be a further meeting to obtain information which could have been covered at the first meeting.
Direct questioning may be needed on matters such as personal expenditure, but you should ask `open’ rather than `closed’ questions and allow the taxpayer to reply fully without interruption. Make it clear that you will not accept unsubstantiated explanations of betting wins or cash hoards EM2050+.
Opportunity for Disclosure
It is of course important, if evidence of irregularities does emerge, to give the taxpayer an opportunity to make a full disclosure and, in appropriate cases, to authorise the work needed to investigate and quantify those irregularities. Unless omissions have been clearly admitted or established at the outset there is no need to do anything more to encourage disclosure at the opening stage of an SA enquiry, when you are merely seeking the information you need to check the return.
If the information provided enables you to accept the return, you should tell the taxpayer there and then and conclude the enquiry.