Investigation work: establishing the facts: where facts are uncertain
In some cases, dealt with under Code 8 or 9, there may be little disagreement about the facts of what has occurred but perhaps a major disagreement on whether liability arises. In others there may be a fundamental disagreement that dominates the whole case.
In some Code 9 cases, perhaps where it is claimed there are gambling wins, cash hoards or money from abroad, we are able to prove that the explanation is false. However in many other cases we cannot. Similarly in Code 8 cases we may suspect the true beneficial ownership of a company but be unable to show conclusively that the taxpayer has provided false information.
It is possible that circumstances will arise where we are able to prove that false information has been provided during our investigation. When this occurs the Investigator should check whether the case falls within the criteria for referral to Criminal Investigation (see Enforcement Handbook for further guidance) and if it does they should bring the case to the Team Leader’s attention immediately, and before the case is compromised.
It may be necessary to refer the case to Criminal Investigation using the Evasion Referral Process. Once it is known that the case will not be taken by Criminal Investigation a record should be made in the file of the consideration given to the case at this point. If referral to Criminal Investigation was made, details of their advice should also be noted in the file. The case can then proceed to civil settlement.
Generally once we are in a position to raise an assessment the onus of proof rests with the taxpayer (but see EM3348, especially for extended time limit assessments).