TTOG11520 | Civil Investigation of Fraud (Code 9): historical record: the opening meeting: immediate response not forthcoming

Where a disclosure is not forthcoming some further explanation may be given. This needs to be handled carefully. The CIF statement itself must not be paraphrased or compromised.

We do not need to disclose our reasons for suspecting fraud, or any evidence held at the opening meeting. Code of Practice 9 makes it clear that we will not disclose our reasons for suspecting serious fraud at the opening meeting. The Court of Appeal in R v Gill & Gill endorsed our current practice saying the Department “was not bound to disclose the nature of its suspicions and there was nothing unfair in its not doing so”.

There is sometimes uncertainty as to how the questions should be answered when there has been a previous quantified disclosure to Local Compliance. The line to be taken is that the questions refer to the absolute position; that is in the taxpayer’s current knowledge and belief.

If the taxpayer in responding to the formal questions is admitting nothing more than what has already been quantified then this should be made clear in summary meeting notes.

We must not be oppressive or misleading. It is a judgement to be made case by case as to the extent to which we try to encourage a disclosure. For example reminding the taxpayer of irregularities or areas of doubt already uncovered by a Local Compliance enquiry is reasonable.

It may be necessary to remind the taxpayer of the gravity of matters, the probable sequence of events in the investigation should the taxpayer make a disclosure may be outlined and, by way of contrast, what may ensue if one is not forthcoming, including the implications for penalty reductions. The Investigator should emphasise that any disclosure a taxpayer makes should be a full and complete disclosure whilst recognising that the taxpayer may not be able to recall precise details at the meeting. In doing this, you must be careful not to show a closed mind to the possibility that there may be an innocent explanation to the matters giving rise to the suspected fraud.

Great care is required. Nothing must be done or said to dilute or distort the CIF statement. There should be no duress and nothing which could be construed as an inducement beyond that contained in the CIF statement itself.