The Assessing Officer — Who They Are and What They Do

Category: Tax Authorities | Reading time: approx. 6 minutes

Everyone who reports income in Israel meets, sooner or later, the "assessing officer." Who exactly is the assessing officer, what are they authorized to do, and what are your rights when dealing with them? This article explains the role of the assessing officer within the Israeli tax system, the broad statutory powers granted to them, the stages of inquiry and assessment, and how to conduct yourself in front of an assessing officer — particularly during examination or inquiry.

Definition of the Assessing Officer

An assessing officer is a state employee acting on behalf of the Director of the Israel Tax Authority. Regional assessing-officer offices operate throughout the country — Gush Dan, Jerusalem, Tel Aviv, Haifa, Beer Sheva and more. Their central role is to determine the tax liability of taxpayers residing in their region, by reviewing and approving submitted returns or — in the absence of a return — by issuing a best-judgment assessment.

Principal Powers of the Assessing Officer

The Income Tax Ordinance grants the assessing officer extensive powers:

• Setting the assessment — approving, amending, or rejecting the submitted return.
• Requesting additional documentation — contracts, invoices, bank confirmations, partner data.
• Investigation and summons to testify — taxpayers, third parties, service providers.
• On-site business audit — auditors are entitled to enter the business and examine the books.
• Disqualification of books — if deficiencies are found, the books may be disqualified and tax imposed according to the officer's estimate.
• Best-judgment assessment — determining income by the officer's own estimation.
• Imposing fines — deficiency penalties, late-filing penalties, deficient bookkeeping fines.
• Seizing assets in cases of tax debt.

Stages of the Assessment Process

1. Filing the return by the taxpayer — the starting point.
2. Self-assessment — if the return is not examined within 3–4 years, it is deemed final.
3. Selection for audit — the assessing officer may select returns for in-depth review.
4. Inquiry and clarification — questions, document requests, meetings with the taxpayer or their representative.
5. Issuing the assessment (Order 08 or 03) — formal determination of tax liability.
6. Objection — the taxpayer may file an objection within 30 days.
7. Objection hearing — a professional discussion with someone other than the signer of the original assessment.
8. Appeal to the District Court — an additional option if the objection is denied.

Best-Judgment Assessment — The Big Threat

If a taxpayer has not filed a return, or if the return does not convince the assessing officer, the officer may issue a best-judgment assessment. In practice, the assessing officer estimates income based on external data:

• Previous capital declarations.
• Data from third parties — banks, National Insurance, credit.
• Comparison with similar businesses in the sector.
• Bank account movements.
• Property and assets owned by the taxpayer.

Best-judgment assessments tend to be higher than actual income. The burden of proof to the contrary lies on the taxpayer — which is one of the important reasons to work with a skilled CPA.

How to Prepare for a Meeting with the Assessing Officer

• Don't go alone — always be accompanied by a CPA or experienced tax adviser.
• Prepare your documentation in advance — contracts, invoices, organized bank confirmations.
• Don't volunteer information that wasn't requested — answer questions specifically.
• Document the meeting — write down all decisions and agreements.
• Don't sign anything you don't understand.
• Remember the hierarchy — if the officer is not persuaded, you have the right to escalate to an inspector, deputy director, and director.

Taxpayer Rights Before the Assessing Officer

The Basic Law: Human Dignity and Liberty, the Freedom of Information Law, and court rulings grant the taxpayer important rights:

• The right to consult a CPA or attorney.
• The right to receive an explanation of the assessment and to review the material.
• The right to object and appeal.
• The right to compensation for delay in refunds owed to you.
• The right to inspect your own taxpayer file.