1. Leo is a tax agent and tax accountant who has been involved in the creation of a range of tax avoidance arrangements concerning tree plantations.

Andrew, an ATO auditor, is particularly interested in the Pine Plantation Scheme and has served Leo with a notice under s. 353-10(1) of Schedule 1 of TAA, requiring him to provide:

a)a copy of any advice given to potential participants in relation to how the Pine Plantation Scheme was alleged to provide tax benefits;

b)a copy of any brochures or other advertising material published by Leo to promote the Pine Plantation Scheme;

c)an explanation of how the scheme is alleged to operate;

d)a list of every person who has entered into a Pine Plantation arrangement; and

e)a table showing when various steps in the implementation of the scheme were taken.

The notice allows 28 days for compliance with its requirements.

Leo does not wish to provide any of the information requested and notes that:

this is the busiest time of the year for him, and preparation of a response to the notice would require him to allocate a number of staff to this task for several days, which would have a severe impact on his business; and

he believes that all the information to which Andrew seeks access is protected by legal professional privilege and/or the 'accountants' concession'.

how can we Advise Leo on the implications for him from the notice served by Andrew and the validity of his reasons for not providing the requested details.

2 Tom and his wife, Kelly, purchased an income-producing property as joint tenants, to secure greater financial independence for Kelly. They entered into a partnership agreement that stated that the net income from the property was to be apportioned 80 per cent to Kelly and 20 percent to Tom, but any losses were to be apportioned 20 per cent to Kate and 80 per cent to Tom.

What are the income tax implications of this arrangement?