Report to the Treasurer and Minister of revenue - by a committee of experts on tax complianceBill Birch Treasurer
Report to the Treasurer and Minister of revenue
By a committee of experts on tax compliance
CHAPTER 9 -
Commissioner's Information-Gathering Powers
9.2 In a self-assessment environment, the provision of accurate and timely information in response to the Commissioner's requisitions becomes very important, as the Inland Revenue Department places increased emphasis on the post-assessment phase of tax collection.
9.3 In order to achieve an equitable levying of taxes, the Inland Revenue Department should, in principle, possess or have access to all information which might affect a taxpayer's liability to tax. The department's resources should be focused on ensuring that all taxpayers pay the correct amount of tax on time. Its resources or energy should not be dissipated in disputes over whether or not it is entitled to have access to a particular item of information.
9.4 Information is the lifeblood of the department's taxpayer audit activity. The Privy Council in New Zealand Stock Exchange and National Bank of New Zealand v CIR144, confirmed the wide ambit of the Commissioner's information-gathering powers and related those powers to the Commissioner's public duty of correctly assessing the taxable income of all taxpayers.
By accident or design, a taxpayer may default in his obligation to furnish a return or to disclose all his assessable income. In order to discharge his duty of assessing and recovering tax on all taxable income, the Commissioner must discover the names of the taxpayers and the respective sources and amounts of their assessable income.145
9.5 The Commissioner's main information-gathering powers are contained in sections 16 and 17 of the Tax Administration Act 1994, and relate generally to access to premises and to requisitions for information. The major exception to these powers is legal professional privilege which is the subject of the next part of this chapter.146
9.6 Under section 16, the Commissioner, or an authorised officer, has at all times full and free access to all places to inspect any books, documents or any matter which the Commissioner considers necessary or relevant for tax purposes. The words 'books' and 'documents' are defined very widely to include records stored electronically and any other type of record. The owner or manager of any property or business which is being investigated may be required to give all reasonable assistance when the Commissioner is exercising his right of access, and to answer all proper questions relating to the investigation either orally, in writing, or by statutory declaration. The Commissioner may also make extracts from or copies of any books or documents which are inspected.
9.7 This general right of access to premises is subject to specific provisions governing access to private dwellings. Entry to private dwellings is not permitted unless the departmental officer has obtained the consent of the occupier, or a judicial warrant has been obtained authorising such entry; the judicial officer issuing such a warrant must be satisfied that it is necessary or relevant for tax purposes.
9.8 Under section 143H of the Tax Administration Act 1994, it is an offence for anyone to obstruct an officer of the department in the exercise of his or her statutory powers. Therefore, it is an offence to refuse an officer access to premises contrary to section 16, including access to private premises when the officer has a judicial warrant authorising entry. The penalty on conviction for such an offence is a fine of up to $25,000 on the first occasion, and up to $50,000 on any subsequent occasion.
9.9 Under section 17, the Commissioner can require anyone to furnish in writing any information, or produce for inspection any books or documents in their knowledge, possession, or control, which the Commissioner considers necessary or relevant for tax purposes. Written information may have to be verified by statutory declaration. The Commissioner may also remove and retain any books or documents produced for inspection for so long as is necessary for a full and complete inspection of them.
9.10 The Commissioner is not required to identify particular taxpayers when requisitioning information under section 17, and is entitled to requisition information about a class of unidentified taxpayers from third parties, such as banks. This interpretation was confirmed by the Privy Council in New Zealand Stock Exchange. With the exception of legal professional privilege, section 17 overrides any contractual duty of confidence, such as that arising from the relationship of banker and customer. The Privy Council in New Zealand Stock Exchange147 said:
The whole rationale of taxation would break down and the whole burden of taxation would fall only on diligent and honest taxpayers if the Commissioner had no power to obtain confidential information about taxpayers who may be negligent or dishonest.148
9.11 It has been held that section 17, by necessary implication, abrogates the right not to answer questions that tend to incriminate: Singh v CIR149; Commissioner of Customs v Ingram150. No one can, therefore, refuse to provide information under a section 17 requisition on the ground of self-incrimination. In Singh, the court stated:
The purpose of the enquiry is to further an investigation initiated because of suspected breaches of the Inland Revenue Department Act. That purpose would be defeated if a taxpayer or other person to whom the request were directed were able to decline to answer on the grounds that the information or material may do exactly what the Commissioner is seeking to do, namely to find evidence relating to possible enforcement proceedings.151
9.12 Under section 143 of the Tax Administration Act 1994, it is an offence to fail to provide information to the Commissioner when required to do so by a tax law. The penalty on conviction for such an offence is a fine of up to $4,000 on the first occasion, $8,000 on the second occasion and $12,000 on any subsequent occasion.
9.13 The importance attached to the Commissioner's power to obtain information under section 17 is reflected in the statement of taxpayers' primary obligations in section 15B of the Tax Administration Act 1994. Disclosure of all information that the tax laws require the taxpayer to disclose must be made to the Commissioner in a timely and useful way.
9.14 In this chapter, the committee recommends some remedial amendments to correct deficiencies identified in sections 16 and 17. Several of these deficiencies were highlighted in the evidence given on specific investigations by the Inland Revenue Department to the Davison Commission152. In its evidence, the department also outlined the barriers frequently encountered in investigations, providing examples of the way in which Inland Revenue Department investigators were hindered in obtaining information.
Records of offshore entities controlled by New Zealand residents
9.15 Under section 17, the Commissioner can require a person to produce for inspection any records in the possession or under the control of that person. Can the section be used to require New Zealand residents who control offshore entities to produce for inspection the records of such entities which are held offshore?
9.16 The answer turns on the meaning of 'control', in particular, whether documents can be regarded as being under the control of a person because that person controls a company which controls those documents. In substance, a New Zealand parent company does have ultimate control over the records of its offshore subsidiaries. However, the records of an offshore subsidiary of a New Zealand company are strictly under the legal and direct control of the offshore subsidiary and its board of directors.
9.17 The Davison Commission considered this issue. Some companies responded to section 17 requisitions for the records of their offshore subsidiaries by saying that the information was the property of the subsidiary company, and it was the decision of the directors of that company either to provide or withhold the information. In its evidence to the Davison Commission, the Inland Revenue Department stated that such responses were an example of the way in which its auditors were often hindered in obtaining all relevant records. The department also cited the delay in obtaining access to such offshore information, which took months, and sometimes years. In principle, section 17 should apply to the records of offshore subsidiaries. The corporate veil can be used too readily to frustrate legitimate investigations of entities which are, in substance, under the control of New Zealand taxpayers.
9.18 The committee favours an amendment to section 17 to ensure that the section can be used to require New Zealand resident individuals and companies to produce for inspection in New Zealand the records of their offshore subsidiaries, which are held offshore. The amendment could involve deeming such records to be under the control of the New Zealand resident.
9.19 For the purposes of determining whether an offshore entity is under the control of a New Zealand resident, any voting interests in that offshore entity held by persons associated with that New Zealand resident should be aggregated with the voting interests held by the New Zealand resident. Such an aggregation rule153, would be necessary to prevent taxpayers circumventing the provision by fragmenting their interests among associated parties. Also, any nominal shareholding held for the purposes of compliance with company law requirements should be disregarded.
9.20 The amendment could provide that any foreign secrecy laws that purportedly restrict the production of any records should be ignored. This measure would preclude any defence of foreign state compulsion, and would be appropriate because an important reason for companies establishing subsidiaries in certain countries in the first place is to take advantage of their secrecy laws. The Australian provision, section 264A(12) of the Income Tax Assessment Act 1936, which relates to requisitions for information held offshore, provides that no account is to be taken of foreign secrecy laws. The United States also has several provisions which provide that the fact that a foreign jurisdiction may impose a civil or criminal penalty for disclosing the information sought, is not reasonable cause for failure to comply with the request. Such a provision would be declaratory of the existing legal position, following the decision of the Privy Council in Brannigan v Sir Ronald Davison154.
9.21 Apart from imposing penalties for non-compliance with a section 17 requisition, the Commissioner can make assessments based on the information available to him, including drawing reasonable inferences from a taxpayer's failure to provide evidence.155
'Necessary or relevant'
9.22 Information can be sought under section 17 only if the Commissioner considers it is 'necessary or relevant for any purposes relating to the administration or enforcement of any of the Inland Revenue Acts'. This requirement has in practice been used by some taxpayers to frustrate legitimate investigations by the Inland Revenue Department. The problem was highlighted in evidence given by the department to the Davison Commission. Some aggressive taxpayers, often acting on professional advice, tested the department on every section 17 requisition, requiring reasons why the department considered the information sought was necessary or relevant. Investigations were slowed down as a result. The Inland Revenue Department also gave evidence that some corporations took the approach first, that an item of requisitioned information was not necessary or relevant in terms of section 17, then subsequently stated that they did not have that information.
9.23 The committee considers that the words 'necessary or relevant' in section 17 encourage taxpayers to raise spurious arguments and re-commends that these words should be removed from this section. Because the Commissioner must always act in good faith156, removing the phrase from the section would not alter this requirement. As long as the Commissioner has, in good faith, reached the view that an item of information is necessary or relevant for tax purposes, it is a valid requisition.
Sending documents to an Inland Revenue office
9.24 A minor deficiency in section 17 appears in the requirement that a person produce documents for inspection at the person's premises. The section does not allow the Commissioner to require that the documents are sent to an Inland Revenue office: Green v Housden157. The committee recommends that an amendment should be made to section 17 to give the Commissioner a discretion to require documents requisitioned under the section to be sent to an Inland Revenue office. The discretion could be exercised if the taxpayer's records were in a remote location and it would be more convenient for any requisitioned documents to be sent to the department. Such an amendment might be achieved by amending the phrase 'when required' in section 17(1) to 'when and where required'.
Removing documents for copying
9.25 Section 16 confers on the Commissioner full and free access to all premises to inspect any books, documents or anything else which the Commissioner considers necessary or relevant for tax purposes. While officers can make extracts from or copies of any books or documents, the Commissioner has no power to remove any books or documents from the premises for the purpose of making copies. The absence of such authority could be problematical in cases where it is not possible or practicable to make copies of documents on the taxpayer's premises, and a risk arises that the documents might be altered or destroyed if a requisition under section 17 were to be made. This shortcoming seems to be a gap in the legislation and the committee, therefore, recommends that an amendment should be made to give the Commissioner this authority under section 16.
9.26 Any power to remove and retain books or documents for the purpose of copying them should be accompanied by a requirement for the documents to be returned as soon as practicable to ensure that the exercise of the power does not unduly disrupt a taxpayer's business or activity. This objective should be expressed in the amending legislation so that the positions under section 16 and 17 are the same.
9.27 A precedent for such an amendment is contained in section 165 of the Customs and Excise Act 1996, which authorises a Customs officer to remove from any place any documents for the purpose of making copies. The documents must be returned as soon as practicable after copies of them have been taken. Similarly, section 206 of the Fisheries Act 1996 enables a fishery officer, in the exercise of the officer's other powers under that Act, to remove for a reasonable time any documents for the purpose of taking copies.
Assistance from third parties
9.28 Section 16(2) confers on the Commissioner the power to require the owner or manager of any property or business which is being investigated under section 16, or anyone employed or previously employed in connection with the property or business, to give reasonable assistance in the investigation, and to answer questions relating to the investigation either orally, in writing, or by statutory declaration.
9.29 Exactly who may be required to give reasonable assistance or answer questions under section 16(2) is uncertain. This uncertainty applies particularly to third parties. For example, take the case where an Inland Revenue Department investigator exercises his or her right of access to the records of a bank of which the taxpayer who is being audited is a customer. Some doubt arises whether the bank manager can be required to give the investigator assistance. On one hand, the taxpayer, and not the bank, is the subject of the investigation, so arguably the bank manager cannot be required to give assistance. On the other hand, the right of access to the bank is given to the investigator under section 16(1), so that, for the purposes of section 16(2), it is the bank that is being 'investigated', and the bank manager can be required to give the investigator assistance.
9.30 In principle, third parties should be required to give reasonable assistance to an investigator or to answer an investigator's questions during an inspection of premises under section 16 because the information can be requisitioned under section 17. For example, if an investigator can have access to a bank, he or she should be able to require the bank manager to identify the safety deposit box of the taxpayer who is being audited. A statutory requirement for third parties to give assistance or to answer questions would also protect them from actions for breach of confidence or infringement of the Privacy Act 1993. The committee, therefore, recommends that the uncertainty over the ambit of section 16(2) should be resolved by clarifying that it does apply to third parties.
9.31 Ensuring that section 16(2) can apply to third parties could be achieved by replacing the references to 'investigation' and 'investigated' with the words 'inspection or investigation' and 'inspected or investigated' respectively. This amendment would remove any doubt that a third party could be subject to section 16(2).
9.32 An alternative approach would be to adopt the terminology of section 263 of the Australian Income Tax Assessment Act 1936, the equivalent provision to section 16. The relevant parts of this provision are set out below:
(1) The Commissioner, or any officer authorised by him in that behalf, shall at all times have full and free access to all buildings, places, books, documents and other papers for any of the purposes of this Act, and for that purpose may make extracts from or copies of any such books, documents or papers.
(3) The occupier of a building or place entered or proposed to be entered by the Commissioner, or by an officer, under subsection (1) shall provide the Commissioner or the officer with all reasonable facilities and assistance for the effective exercise of powers under this section.
9.33 It is immediately apparent that the Australian provision is more concise than its New Zealand equivalent. It undoubtedly applies to third parties. The main difference between section 16(2) and the section 263 is that the latter does not require that the investigator's questions are answered. However, it is arguable that the requirement to answer questions set out in section 16(2) is redundant, because the Commissioner must be given all reasonable assistance and has other information-gathering powers. Answering questions orally would generally come within the ambit of the requirement to give the investigator all reasonable assistance. As well as not obstructing the investigator and providing such things as sufficient light, air, and space for an inspection, reasonable assistance would extend to answering questions on the precise location of an item. For example, a bank manager would be required to identify the taxpayer's safety deposit box in a vault. The committee notes that in practice, the Commissioner would not rely on section 17 for answers to such questions, because that section requires information to be furnished only in writing and not orally. Such an approach would not be practical when conducting a search of premises for particular items. Section 17, of course, could be relied on if the investigator wanted written answers to any questions.
9.34 The Australian section 263 also differs in that it applies only to the current occupier of the place being inspected, whereas section 16(2) can apply to former employees, for example, a former bank employee who handled the taxpayer's transactions with the bank. If investigators had to rely on the wording in the Australian provision, they would need to use section 17 to extract written answers from the ex-employee. If investigators wanted oral answers from the ex-employee, they could use section 19 of the Tax Administration Act 1994, which gives the Commissioner the power to conduct an inquiry for the purpose of obtaining information by requiring people to attend before the Commissioner and answer questions.
9.35 In summary, then, the committee recommends that the following amendments should be made to sections 16 and 17 of the Tax Administration Act 1994:
Section 17 should be amended to deem the records of an offshore entity controlled by a New Zealand resident to be under the control of that New Zealand resident.
Section 17 should be amended to remove the words 'necessary or relevant'.
Section 17 should be amended to give the Commissioner the discretion to require that documents requisitioned under that section should be sent to an Inland Revenue office.
Section 16 should be amended to allow documents to be removed from premises for copying and to be returned as soon as practicable.
Section 16(2) should be amended to clarify that it applies to third parties.
9.36 The main limitation on the Commissioner's information-gathering powers is legal professional privilege. Legal professional privilege can attach to both communications in which legal advice is sought and given, and also to communications in the context of litigation. This common law doctrine is embodied in section 20 of the Tax Administration Act 1994.
9.37 In this chapter, the committee considers whether the ambit of legal professional privilege preventing disclosure of information to the Commissioner is too wide, and makes some recommendations limiting the scope of legal professional privilege and its abuse. Two distinct issues arise: first, the abuse of the privilege, and secondly, the Inland Revenue Department's challenges of that abuse.
9.38 Section 20 was originally enacted in 1958 as section 16A of the Inland Revenue Department Act 1952 in response to the Court of Appeal's decision in CIR v West-Walker.158 The enactment was an attempt to express that decision in statutory form, while preventing its application to certain financial records, such as trust accounts. In West-Walker, the court held that a solicitor was entitled to decline to furnish to the Commissioner information protected from disclosure by legal professional privilege without the prior consent of the client.
9.39 Section 20 provides that any information or book or document is privileged from disclosure in the following circumstances:
If it is a confidential communication passing directly or indirectly between a legal practitioner in his or her professional capacity and a client, or between legal practitioners in their professional capacity; and
If it is made for the purpose of obtaining or giving legal advice; and
If it is not made for the purpose of committing some illegal or wrongful act.
9.40 Section 20 probably constitutes a code for legal professional privilege to the extent that it applies to communications between a lawyer and a client. A claim for privilege in relation to such communications does not lie apart from the privilege permitted by the section. However, the section is silent on the application of legal professional privilege to protect communications with third parties relating to actual or contemplated litigation. If anyone refuses to disclose information to the Commissioner on the ground that it is privileged under section 20, an application can be made to a District Court Judge to determine whether the claim of privilege is valid.
9.41 The New Zealand courts have followed the approach taken in the United Kingdom and have held that privilege applies if the dominant purpose of the communication relates to the provision of legal advice: Guardian Royal Exchange v Stewart.159 In contrast, the High Court of Australia has adopted a sole purpose test: Grant v Downs.160 However, in practice this approach, as illustrated in FCT v Citibank Ltd161 has not significantly assisted the Australian Tax Office in preventing its investigations being hindered by privilege claims.
9.43 In Leary v Federal Commissioner of Taxation163, a decision of the Australian Federal Court, it was held that a lawyer acting primarily in the role of a promoter of a scheme was unable to rely on legal professional privilege. Brennan J explained that:
[The] activities of an entrepreneur in the promotion of a scheme in which taxpayers would be encouraged to participate fall outside the field of professional activities; those activities are not pursued in discharge of some antecedent professional activity. Entrepreneurial activity does not attract the same privilege nor the same protection as professional activity; and the promotion of a scheme in which particular clients may be advised to participate is pregnant with the possibility of conflict of entrepreneurial interest with professional duty.164
9.44 In Miller v CIR165, the High Court held that legal professional privilege extends to communications between salaried solicitors and their employer clients, if the solicitor is acting in his or her capacity as a legal adviser, and not in some other capacity, such as an executive capacity. The case involved discovery of legal opinions prepared by Inland Revenue solicitors. Baragwanath J applied the main Commonwealth precedent of Alfred Crompton v Customs and Excise Commissioners (NoÂ 2).166
9.45 In Dinsdale v CIR167, the High Court has also recently held that legal professional privilege does not extend to the notes of interviews conducted with a number of third parties by auditors of a bank on instruction from the bank's solicitors. The notes were not communications between a lawyer and client, so section 20 did not apply. The High Court's decision was upheld by the Court of Appeal.168
9.46 There is ground for arguing that legal professional privilege is being used to obstruct the Inland Revenue Department whose auditors are obliged at present to allow taxpayers the opportunity to claim privilege for any requisitioned documents: FCT v Citibank Ltd169. In evidence before the Davison Commission, legal professional privilege was cited by the Inland Revenue Department as:
... one of the biggest obstacles to the Inland Revenue Department when it is conducting large corporate investigations. ... The veil of privilege weakens the department's ability to carry out its [revenue collection] duty because of the opportunity it provides for exploitation.170
9.47 The following examples of where the Inland Revenue Department considers that its investigations have been hindered, and which mainly concern privilege claims, were given by the department in its evidence to the Davison Commission:
Claiming privilege for materials held on a solicitor's file but clearly not involving matters of legal advisory nature.
Taking a restrictive interpretation of the word 'control' over information held by a corporation's solicitors, when faced with a wide-ranging Inland Revenue Department information request.
Removing documents from files made available for inspection and not informing the Inland Revenue Department that legal professional privilege has been claimed.
Mixing documents relating to transactions with, or not separating them from legal advisory papers, and claiming a blanket privilege for all documents.
Including transaction details in the document containing legal advice to hide them from the Inland Revenue Department.
Preventing access to offices where important records may be retained without giving the owner sufficient notice that a claim of legal professional privilege can be made.
Claiming privilege through accountants and officers of companies holding legal practising certificates.
9.48 Some of these practices seem to the committee so clearly outside the scope of any valid claim to privilege that they are clearly beyond the limits of acceptable professional behaviour.
9.49As well as severely limiting the Inland Revenue Department's powers to obtain information, such broad claims for legal professional privilege provide lawyers with a competitive advantage vis-Ã -vis other tax advisers. Privilege may be claimed for tax advice from a lawyer when advice of exactly the same nature provided by an accountant, would not be privileged. Accounting professionals have expressed their concern, although their preference is to widen professional privilege to include advice from accountants.
9.50 It is well established that no privilege exists against self-incrimination in relation to the Commissioner's information-gathering powers: Singh v CIR171; Commissioners of Customs and Excise v Ingram172. Lord Goddard CJ stated that such privilege would 'stultify the whole purpose' of the revenue's information-gathering powers.
9.51 It seems to the committee that the existence of legal professional privilege in tax matters, other than litigation-related privilege, is inconsistent with the absence of any privilege against self-incrimination on tax matters. In his dissenting judgment in CIR v West-Walker173 which led to the original enactment of section 20, Stanton J wrote:
I cannot think that the rules of evidence relating to the protection of privileged communications is of any higher status than the similar rule against requiring a witness to incriminate himself.
9.52 The committee regards the privilege against self-incrimination as more fundamental than legal professional privilege. Considering the former privilege no longer applies in tax cases, there is a strong argument that the latter privilege should also not apply in tax cases. Therefore, on the issue of the application of legal professional privilege, other than litigation-related privilege, tax cases can be distinguished from other cases.
9.53 The Organisational Review Committee considered the issue of legal professional privilege174. It stated that it might be appropriate to reconsider legal professional privilege generally in relation to tax matters, noting a growing trend in litigation to place all cards on the table. This statement was made following submissions by the New Zealand Society of Accountants that privilege should be extended to tax advice given by its members. 175
9.54 The committee notes that it was the view of the Davison Commission176 that legal professional privilege in all tax matters should be abolished. The Commission itself experienced considerable difficulties with privilege claims during the course of its investigations.177
9.55 The Law Commission has also considered the issue of legal professional privilege in tax matters. If the Commission proceeds in the way the committee understands is likely, its approach will solve a number of the problems that have arisen in the tax area.
9.56 The committee understands that the Law Commission is to recommend the abolition of privilege for tax advice. The proposal is intended to allow the Commissioner to have access to all communications between a lawyer and client which are generated before the filing of the taxpayer's return. The New Zealand Law Society has opposed this change. The Law Commission's rationale for the exclusion of tax advice from privilege is based on a strong public interest in keeping the Commissioner fully informed. It considers that because tax collection is dependent on disclosure, there must be full disclosure.
9.57 The Law Commission proposes an amendment to section 20(1)(b) of the Tax Administration Act 1994, so that privilege would be available only for confidential communications with legal advisers when those communications are brought into existence for the purpose of obtaining or giving legal advice or assistance in relation to the subject matter of an income tax return that at the time of obtaining the legal advice or assistance, has been or ought to have been furnished.
9.58 The Law Commission's proposals remain in draft form and have not been published. The committee would have no quarrel with what the Law Commission is proposing.
9.59 The committee does not make any final recommendation on the scope of the existing legal professional privilege rule applying in tax matters, because it would prefer the government to refer to the more detailed work undertaken by the Law Commission, which has had more time to consider this issue than has the committee.
9.60 However, apart from any consideration of the wider issue of whether the rules of privilege applying in tax matters should be relaxed, the committee recommends that two specific amendments should be made to section 20. The committee supports an amendment to ensure the physical protection of documents once a claim for privilege is made, and pending the determination of its validity by a District Court Judge under section 20(5) of the Tax Administration Act 1994. If claims for privilege are made, procedural rules would be necessary to safeguard documents by, say, ensuring they are placed in a package which is sealed and delivered to the nearest District Court registrar for safe custody. Such rules would be necessary to protect documents from abusive practices such as removal, destruction or tampering. A precedent for such protective procedures is contained in section 232 of the Canadian Income Tax Act.
9.61 The committee also favours an amendment to section 20 to make conditions of privilege the identification of the document and the ground on which privilege is claimed. At present, section 20 contains no such requirement. This deficiency was reflected in the evidence of the Inland Revenue Department to the Davison Commission which referred to the practice of documents being removed from files made available for inspection and Inland Revenue Department not being informed that privilege had been claimed for them.
9.62 The rules used for identifying documents for which privilege has been claimed for discovery purposes in civil litigation proceedings could form the basis of such an amendment. Those claiming privilege would be required to identify the documents and state the grounds for privilege by affidavit.
9.63 In summary, the committee recommends that the government should await the outcome of the Law Commission's study of legal professional privilege before making any decisions on the scope of this privilege. In the interim, the committee recommends two specific amendments to section 20:
An amendment should be made to ensure the physical protection of documents for which legal professional privilege is claimed pending judicial determination of the claim's validity.
An amendment should be made to require the identification of documents for which privilege is being claimed as a condition of obtaining privilege.
144 (1991) 13 NZTC 8,147
145 (1991) 13 NZTC 8,147 at 8,148
146 Section 20, Tax Administration Act 1994
147 New Zealand Stock Exchange and National Bank of New Zealand v CIR (1991) 13 NZTC 8,147
148 (1991) 13 NZTC 8,147 at 8,149
149 (1996) 17 NZTC 12,471
150  1 All ER 896
151 Singh v CIR (1996) 17 NZTC 12,471 at 12,477
152 For a brief outline of the work of the Davison Commission, see appendix 2.
153 Similar to that used in the controlled foreign company regime.
154  1 NZLR 140
155 See paras 13.54 to 13.80
156 Which may include an honest mistake.
157 (1993) 15 NZTC 10,053
158  NZLR 191
159  1 NZLR 596
160  135 CLR 674
161 (1989) 89 ATC 4268
162  NZLR 191
163 (1980) 80 ATC 4438
164 (1980) 80 ATC 4438 at 4452
165 (1997) 18 NZTC 13,001
166  2 QB 102
167 (1997) 18 NZTC 13,244
168 (1998) 18 NZTC 13,583
169 (1989) 89 ATC 4268
170 Nash, July 1995, Supplementary Brief of Evidence, page 19
171 (1996) 17 NZTC 12,471
172  1 ALL ER 927
173  NZLR 191
174 Organisational Review Committee, Report on the Organisational Review of the Inland Revenue Department, April 1994, para 9.52
175 Arguments for extension are mainly based on accountants achieving horizontal equity with lawyers in the area of tax advice.
176 Commission of Inquiry into Certain Matters Relating to Taxation, Report of the Winebox Inquiry, August 1997
177 See pages 1:5:26-1:5:31