Estimated or Protective Assessments

When the IRD's assessors did not accept a taxpayer?s profts tax returns. They may estimate the
taxpayer?s liability to profits tax in the relevant years under IRO s.59(2) and issued assessments
accordingly. Those estimated assessments may sometimes be characterised as ?protective
assessments?. Despite the informal term occasionally used to describe them, these assessments are
genuine and valid in the sense that, under IRO s.59(2), it is binding on a taxpayer, subject only to the latter
objecting to the assessments within the statutorily stipulated time and the taxpayer?s objections being
upheld in subsequent determinations by the Commissioner or Board of Review.
To avoid the assessments become final and conclusive under s.70, it is usual for a taxpayer to object such
assessment under the procedure in IRO s.64. The Commissioner must then make a determination upon
the taxpayer?s objections ?within a reasonable time? (IRO s.64(2)). However, if the assessment has been
made under section 59(3) where a person has not furnished a required return under section 51, the notice
of objection against such assessment will not be treated as valid unless the return required under section
51 has been made in addition to such notice.