Who wins dispute about taxable income?

The Administrative Appeals Tribunal (AAT) has affirmed the ATO’s decision, based on the taxpayers modest income when compared with a high volume of money passing through various accounts.

   

 

The taxpayer was employed as a beauty technician.

Her pay varied every week to reflect her working hours and she was always paid in cash without receiving pay slips.

While the Commissioners’ analysis of bank accounts, records of international money transfers and casino data suggested the applicant spent 44% in one year and 73% in another year more than the declared income.

In cases like this, the Commissioner is effectively making an informed guess as to the taxpayers income.

Provided there is a rational basis for the estate, the Commissioners assessment will stand, unless the taxpayer is able to:

  • demonstrate the assessment was excessive; and
  • establish what the correct (or more nearly) correct figure is.

In examples like this, the Commissioner nearly always wins.

 

AcctWeb

Free Ebook

22 Key Strategies to Dramatically Improve Cashflow in Your Business

What our clients say

"The team at CP Partners Accounting & CP Financial Planners have provided our clients with expert advice in the areas of taxation, property structures, wealth creation, retirement planning, superannuation, insurance and general investment advice.

"We have undoubtedly found that the team at CP are experts in their fields and our clients have been extremely pleased with the results they have achieved....

Read more