2)

Jones, Lang Salle and Co is a public accounting partnership with eight partners, 15 employed salaried accountants and 20 support and secretarial staff. The partnership has offices in North Sydney, Parramatta and Newcastle. Although it is involved in some long-term projects, approximately 75% of turnover is represented by work taking less than three months to complete. Up to and including the year ended 30 June 2017, the partnership submitted its income tax returns on a cash received basis and the Commissioner assessed them on this basis. Because of the increasingly complex nature of its activities, however, the partnership decided to submit its return for the year ended 30 June 2018 on an accruals basis. Your advice is sought on the following matters:-

(a) Must the Commissioner accept the altered basis for returning income? What are the relevant considerations? (b) For tax purposes, in which income year are fees which were earned but not received prior to 30 June 2017 regarded as having been derived?

(c) What treatment should be adopted in respect of the value of work-in-progress (i.e., uncompleted work) at the end of 30 June 2018?.

Question 3)

Go back to TUTORIAL 3, Question 1 (c), on page 8 of this Tutorial Guide: Read that question and answer the following: Would your answer be different if Miko was an international student? If so, how? - (To answer this, READ: Woellner 9.015).

Question 4)

Stefan is an airline pilot who was trained in Belgium but has worked for a Malaysian airline for many years. He decided in December 2017 to apply to Australian airlines for a position so that he could move here to be with an Australian woman he had met overseas. He finds out that it may be years before he gets permanent employment in Australia. So, from 1 February 2018 to 30 June 2018 he works for different Australian airlines under short-term contracts (never more than 30 days for any contract). Although he lives in short-term accommodation in different Australian cities during this period, he hopes to find permanent employment in Sydney. He takes lessons to improve his English, upgrades his Australian flying qualifications and joins a local soccer team. Discuss Stefan's likely status (resident or not) for Australian tax purposes for 2017/18, and explain the effect on his tax liability.