ATO settlement offer slammed
Taxpayers Australiahas labelled a settlement offer by theAustralian Tax Office(ATO) for involvement in mass-marketed agricultural schemes “rough justice” following a court decision last week ruling in favour of taxpayers.
Last year the ATO made a settlement offer to around 60,000 taxpayers who had invested in ‘tax-effective’ agricultural projects.
Under the settlement the taxpayers were required to pay back the deductions they received as a result of the tax schemes, but would still be able to claim their cash outlay as deductions and avoid paying any penalties or interest on the tax debts they owed to the ATO.
While it was a condition of the offer that they could not then benefit from any favourable court outcome, around 87 per cent accepted the offer, which expired on June 21 2002.
However in a decision handed down early last week, the Federal Court found in favour of a taxpayer in the case of Sleight v Commissioner of Taxation.
The Federal Court ruled that the taxpayer did not enter the project for the dominant purpose of acquiring a tax benefit.
Taxpayers Australia says, “This is a win for taxpayers who held out, but a loss for those who accepted the ATO’s settlement offer in good faith”.
“This decision by the court sends a clear message that the ATO’s blanket approach to denying deductions to investors in all tax effective investment projects, irrespective of the facts and circumstances of each case, is rough justice.”
Recommended for you
AZ NGA has entered into a strategic partnership with national advice firm MiQ Private Wealth, as a way to provide a succession solution, as well as career development opportunities for staff.
While the advice profession struggles under growing operating costs, Adviser Ratings has found more than half of practices – some 58 per cent – that generate less than $250,000 in revenue report no profit at all.
The Federal Court has ordered the freezing of assets and the appointment of receivers to two entities linked to Australian Fiduciaries, ASIC’s latest move in an ongoing investigation into the company’s managed investment schemes.
Off the back of the August adviser exam results, the profession has seen 17 new entrants hit the Financial Adviser Register (FAR) this week, helping numbers return to positive territory.
