The AAT has upheld default assessments against husband and wife taxpayers.
The AAT said that in 2010, the husband was found guilty of the offence of carrying on the business of unlawfully trafficking in a dangerous drug and was sentenced to imprisonment for 8 years. Part of the Crown case was that during those years almost id=”mce_marker”.3m was deposited, in cash, into accounts in the name of the husband and his wife. Neither of them lodged tax returns during those years.
In 2008, the Commissioner commenced an investigation into the affairs of the taxpayers, which resulted in him issuing s167 default assessments of the taxable income of each of the taxpayers for the 2004 to 2007 income years, totaling over $2.8m. Penalties were also imposed. The taxpayers’ objections were disallowed and they appealed to the AAT for review.
The Tribunal upheld the Commissioner’s objection decisions. It said the fundamental difficulty for the taxpayers was that their case “never came to grips with what they were required to show – what the actual amount of their taxable income was in each of the 4 years”. Instead, the Tribunal said they unsuccessfully sought to demonstrate that the Commissioner was in error in some aspects of his approach. They did not establish the assessments were excessive.
The Tribunal said there was no basis for remission of the penalties imposed.
([2014] AATA 896, Re Upson and FCT, AAT, Hack DP, AAT Refs: 2013/0140-0143; 2013/0146-0149, 4 December 2014.)
[LTN 236, 5/12/14]