RMB Articles

Family Court and the Taxation Office

Posted 12-08-2014
Written by admin 101
Category Family Law

Documents filed in the Family Court generally cannot be viewed or used for purposes other than the proceedings before the Court unless there is express permission given by the Court.

However, there has been a recent Family Court case which resulted in the Commissioner of Taxation (ATO) being allowed to access documents filed in the Family Court to conduct an audit of the husband's taxation affairs.

Whilst this recent decision will now make it easier for the ATO to access financial information filed in the Family Court, people should not jump to the conclusion that providing information in their Family Law Court documents could lead to a tax audit.

In this particular case the ATO was already investigating the husband's financial affairs prior to the Court proceedings being settled by consent of the husband and the wife.

The information the ATO used related to the value of the husband's assets, his income, expenditure and funds available to him to support his lifestyle.

However, parties to Family Court proceedings should be aware that there is a risk that any information they provide in their sworn statements to the Court may ultimately be accessed by investigating agencies, and further that the Court can and does refer some matters to the ATO for investigation.

The rule for parties to a Family Law Court matter to remember is that they will be required to be full and frank in disclosing their financial circumstances and that they need to be as honest and truthful as possible in the evidence they provide to the Court.

In fact they will be required to sign a document stating that they have been full and frank in their financial disclosure. Failure to comply with this obligation can result in the Court imposing penalties.

Equally, in the event that litigants fail to declare income to the ATO and then provide contradictory evidence as to their purported income in their Family Court matter, they risk that information being provided to the ATO to investigate and/or prosecute them.