New draft ruling on individual tax residency
Draft ruling TR 2022/D2 has been released which outlines the residency tests for individuals for tax purposes as set out in subsection 6(1) of the Income Tax Assessment Act 1936 and the Commissioner’s view on when they consider a person will be a resident of Australia. The ruling explains that the definition of ‘resident of Australia’ has four alternative tests, the first three of which are determined by considering all of an individual’s relevant facts and circumstances. Because of this, there are no ‘bright-line rules’ or any single factor which can determine this. The ruling consolidates and replaces the material in Taxation Rulings IT 2650 and TR 98/17 and also updates the views reflected in those Rulings to take into account developments in case law (including inter alia Harding, Pike and Addy).
Tax agent who crossed the line ends up in jail
A former tax agent and accountant has been sentenced to six years in jail for claiming more than $800,000 in fraudulent refunds. Between December 2014 and January 2018, the agent submitted several false tax returns under clients’ names without their knowledge or consent, and also submitted some valid tax returns for clients but had the corresponding refunds deposited into their own bank accounts. Colleagues from the agent’s firm first detected a string of abnormal transactions and subsequently alerted the Australian Taxation Office (ATO) and the Tax Practitioners Board (TPB). In total, the former agent will face spending six years in jail, with a non-parole period of three years six months, and to repay $612,648.
Determination on CGT cost base
The ATO has now released TD 2022/14 If a non-contingent liability to pay a specified amount is included in the cost base of your CGT asset under either subsection 110-25(2) or section 112-35 of the Income Tax Assessment Act 1997 and you deduct or can deduct that amount, does subsection 110-45(2) of that Act apply?. The Commissioner answers in the affirmative, such that the amount does not form part of the cost base of the CGT asset. This is consistent with the principle that an item of expenditure should either be deductible for income tax purposes or included in the cost base of an underlying asset for CGT purposes, but not both.
Copies of tax documents request
Most requests for copies of tax documents can be made using the ATO’s online services if an agent has the required authority. The documents available differ depending on the entity type and whether they are held by the ATO, including income tax returns and notice of assessments from 1997 onwards, payment summaries or income details from 2002 onwards, activity statements from 2000 onwards and FBT returns from 2001 onwards. The quickest and easiest way to review and print copies of tax documents is by using online services but in some circumstances you may need to phone the ATO instead.
