Jeopardy assessment

A jeopardy assessment is an accelerated form of tax assessment carried out when a tax authority believes that delaying the usual assessment process could jeopardize the collection of taxes. This approach is invoked when there is a reasonable concern that a taxpayer might move, conceal, or dissipate assets in a way that would hinder future tax recovery. To prevent potential loss, the officer can determine the tax liability immediately, bypassing the standard timelines.

Illustration:

For instance, if a taxpayer is suspected of evasion and appears to be shifting funds or property outside the country, the tax authority may issue a jeopardy assessment on the spot. This ensures that the tax due is calculated and protected before the assets are transferred beyond reach.