QUESTION 4 TAXATION ADMINISTRATION, DESK AUDIT, AMENDMENT, OBJECTION, and PENALTIES

On 1 July 2019 Jeremy Jenkins, a TV producer for the Jetflix Channel, was subject to a desk audit. Jeremy has been requested by the ATO to substantiate his claim in relation to professional expenditure incurred during the tax year ended 30 June 2020. On the 27th February 2021 and following a desk audit, Jeremy received an amended assessment; the original assessment was dated 30 November 2020. The amendment disallowed expenditure incurred for an overseas conference of $14,500. Jeremy was uncertain as to whether the amount was tax deductible. He nevertheless had claimed the expenditure as a deduction in his tax return.

REQUIRED:

Part 1

What course of action is available to Jeremy if he wishes to dispute the amended assessment? (3 marks)

Part 2

What are the relevant time limits available for Jeremy to lodge his dispute against the amended assessment? (3 marks)

Part 3

If Jeremy is dissatisfied with the objection decision by the Commissioner, what course of action is available for Jeremy. (3 marks)

Part 4

Would you recommend Jeremy go to the AAT or Federal Court regarding this matter? Why? (2 marks)

Part 5

Identify and explain the penalties the Commissioner may impose in respect of the amended assessment. (4 marks)

(3+3+3+2+4 = 15 Marks)

In your responses, ensure you state the appropriate legislation, tax rulings or common law cases to support your answer.