Compare the decision in FC of T v Anstis 2009 ATC Â¶20-142 with the decisions in Lunney and Hayley v FC of T (1958) 100 CLR 478 and FC of T v Maddalena 71 ATC 4161. Is it possible to reconcile the outcomes in these cases? Essay Example
In the case concerning FC of T v Antis of 2009, the judge observed that the case in question is confined to the regulations of taxation authority and therefore thorough assessment of the taxpayer’s income was needed. Basing the decision on the earlier judgment on the case of Federal commissioner of Taxation v Day of 2008, the judge observed that productive assessable income will reveal the outgoing or loss nature of the case. The inquiry done on the taxable income will show the extent to which expenditure or loss is accrued in the course of producing or gaining on it. According to the tax authority regulation, qualification for receipt of Youth Allowance in the assessable income compilation was deemed productive when the activity tests performed were satisfying. In case of satisfying the tests given, the individual was supposed to be enrolled in the education sector or institution to undertake the prescribed course. The judge went on to provide a clear distinction between the child care expenditure and the Youth Allowance that was demonstrated in the case. Despite the fact that the expenditure in the defendant’s assessable income denoted that Youth Allowance was “self-education expenses” it was clear that the expenditure was not supposed to be treated as non-allowable expenditure in the tax returns that were filed. The judge ruled that the defendant had a case to answer he was undertaking tax evasion which is actionable in the courts of law. The judgment was based on the taxation authority regulations on the penalties derived when a taxpayer evades the payment of taxes.
Like the case of FC of T v Antis of 2009, the Lunney and Hayley v FC of T case of 1958 was not different and was against the taxation body regulations and standards. In this case, the defendant was charged with tax evasion with the case before the court pointing out that Lunney and Hayley were responsible for tax evasion. The transportation expenses in which Lunney incurred from his place of residence, Narraweena, to the place of work a distance of approximately fourteen miles. The court wanted to deduce whether this amount for the current financial year was considered allowable expenditure or not. According to section 48 of the Income tax regulations, when an amount is classified as allowable expenditure it should be deducted from the assessable income of taxpayers when calculating the individual’s taxable income (Braedon C. Clark 201). The court observed that in the course of his undertakings, the employer did not provide him with any allowance to cover the transport costs he incurred and there was no compensation on the time taken in travelling from his residential premise to the place of work. The judge also showed that the wage rate that the workmen were paid was only based on the work done but no effect or standardization was made on the transportation of the workers. The taxpayer, in this context, was not able to carry on any activity that would have produced or gained his/her assessable income (Rob Woellner 235). From the analysis of the assessable income provided for the taxpayer, the judge ruled that although the expenses incurred were solely and with the intent of provision of transportation to taxpayer’s place of work, has been justified beyond reasonable doubt that its main objective was to provide a gain to the taxpayer’s income and not necessarily for domestic or private usage. The judge concluded that the taxpayer’s transportation expenses were incurred in producing or gaining the assessable income of the taxpayer and in any means was it a private expenditure. Therefore, the amount was considered allowable deduction according to section 51 (1) thus deducted from the assessable income to arrive at the taxable income of the employer.
Consequently, in the case of FC of T v Maddalena 71 ATC 4161, the defendant was accused for tax evasion (Barkoczy 54). The case in the courts of law was that the defendant had been looking for a job and after a thorough search he was accorded by a football club a contract. After a while the footballer decided to look for employment somewhere in a different club. The footballer incurred expenses in the process and was able to meet the obligations with his personal finances. After acquisition of a new contract with another club, the footballer challenged his former club to reimburse him for the expenses he incurred when searching for employment in a different. The court ruled that the travel expenses incurred by the footballer were not deductible because the expenses were incurred when the defendant was seeking employment but not when working. Therefore, the expenses were considered not to gain the assessable income.
In the three cases above, the Australian tax regulation body requires that for expenditure to be considered as deducted it must be incurred with the regulated time frame, it must be proved beyond reasonable doubt that there was a gain in the assessable income, apportionment and there is sufficiency in connection. Both the cases navigated on deductible and non deductible expenditures and the court was given the mandate to figure out where the expenses lied in order to ascertain the taxable income to be charged.
Barkoczy, Stephen. Australian Tax Casebook 9e. Sydney: CCH Australia Limited, 2000.
Braedon C. Clark, Leslie G. Miller. Taxation and sport in Australia. Sydney: Federation Press, 2000.
Rob Woellner, Stephen Barkoczy, Shirley Murphy, Chris Evans. Australian taxation law 2009. Sydney: CCH Australia Limited, 2009.
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