Three taxpayers have been successful before the AAT in matters concerning GST assessments, as well as income tax-related issues concerning deductions for superannuation and Div 7A issues (pertaining to company loans). The matters were remitted to the AAT for rehearing as ordered by the Federal Court on 3 September 2012.
The background facts are complex involving 3 taxpayers referred to by the AAT as Applicants A, B, and C. Applicant C was the sole shareholder and director of Applicant B and Applicant A. Applicant C was an accountant and his firm, Applicant A, provided accounting services. In addition, Applicant C was a director and shareholder of other private companies, some of which his brother was also a director and shareholder. Between about 1994 and 2001, in conjunction with a non-related company, Company F, Applicant C was involved through his accounting firm in providing services to the State Government in managing the Company A loan program, a low cost home loans program offered by the State. Following a tax audit, which commenced in May 2004 and concluded in mid-2006, assessments for tax and penalties were issued.
The AAT was required to make findings in relation to: an agency issue; superannuation expenses, interest expenses, carried forward tax losses, quantum of remuneration received from the Company A contracts, Div 7A deemed dividends, and penalties. Broadly, the AAT accepted, in the main, the submissions and evidence presented by the taxpayers. As a result, the relevant GST and income tax assessments (and penalty assessments) were remitted to the Commissioner for recalculation in accordance with its orders.
(AAT Case [2014] AATA 572, Re The Taxpayers and FCT, AAT, Ref Nos: 2007/1955, 2007/1956-61, 2007/1964, 2007/1966-69 and 2007/2905-2910, Nicholson DP, 14 August 2014.)
[LTN 159, 19/8/14]
Catchwords [2014] AATA 572
INCOME TAX – GST – accountant sole shareholder and director of two proprietary companies- second company incorporated to act as manager of low cost government loan program- whether second company agent of first company – whether first company claimed deduction for superannuation – whether first company fully paid interest expense – quantum of money received by first company from government agencies – whether accountant’s income should include deemed dividends – whether penalties for ‘intentional disregard’ appropriate – whether penalties should be applied – whether penalty uplift appropriate – remission