Cooper Grace Ward tax partner Fletch Heinemann is helping
accountants manage issues around ATO findings of 'fraud' or
'evasion' following recent decisions by the Full Federal
Court and Administrative Appeals Tribunal.
'If the ATO passes down an opinion of 'fraud' or
'evasion', the two or four year periods it usually has to
amend an income tax assessment no longer apply,' Mr Heinemann
'Essentially the taxpayer has the onus of disproving fraud
or evasion, while the ATO does not have to prove or provide
evidence to support their 'opinion', he said.
And particular problems arise for unexplained deposits, which
the ATO often identifies as deposits in a taxpayer's bank
account that are assumed to be income – unless there is a
credible explanation for why the amounts are not income.
'Hopefully common-sense prevails so that a relatively small
deposit received many years ago does not support an amended
assessment issued following an opinion of 'evasion'.
Otherwise, this type of amended assessment would effectively be
unchallengeable if the taxpayer cannot recall what the deposit was
for,' Mr Heinemann said.
'Taxpayers' circumstances will vary significantly and it
would not be unusual to see taxpayers receiving sums of money
outside the four year amendment period that the taxpayer cannot
explain. The further into the past, the more likely that the
taxpayer's memory will be fallible and that corroborating
evidence will be unavailable.
'We often see a taxpayer or their advisers not provide a
comprehensive response in the first instance. If evidence is later
provided, the ATO often looks at it sceptically –
particularly if the ATO earlier invited the taxpayer or adviser to
provide evidence and they chose not to for some reason.
'Providing corroborating evidence is critical for the
'There is currently a special leave application before the
High Court, so we might be seeing more developments in this
Cooper Grace Ward is a leading Australian law firm based in
This publication is for information only and is not legal
advice. You should obtain advice that is specific to your
circumstances and not rely on this publication as legal advice. If
there are any issues you would like us to advise you on arising
from this publication, please contact Cooper Grace Ward
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Depending on the type of ETP, the employee's age and years of service, the amount may be taxed in various different ways.
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