Mike Curtains, a Registered Tax Agent, attends to the tax affairs of Frodo West. In preparing

Frodo$$s $2022/23$ income tax return, the following occurred:

$$ Frodo attended a meeting with Mike in August $2023$ where he instructed Mike to complete

his return and handed over records that related to the tax return

$$ Mike Lodged the retun in July $2024$ resulting in a late lodgement penalty of $$900$

$$ Subsequent audit activity showed that Mike had incorrectly not included $$2,000$ of interest

income in Frodo$$s return $$ Frodo had provided Mike with all of his interest details

$$ The audit also revealed that net rental income of $$2,000$ had not been included $$ Frodo had

forgotten to mention his rental property to Mike

$$ These two adjustments had resulted in a tax shortfall of $$1,860$ and penalties totalling $$500$

$$ An attempt to audit Frodo$$s previous three years of tax returns revealed that Mike had

thrown out all of Frodo$$s tax returns, vouchers, and records. A penalty of $$3,600$ was issued

for incorrectly keeping rcords.

$2$ of $7$

FNSACC$601$ Assessment $3$ v$1\mathrm{.}1$

Applied Education

REQUIRED:

Using the template provided:

a$)$ How much will Frodo be required to pay for these adjustments and penalties?

b$)$ Which amounts will Mike be liable to pay?