Case 1 : Objection against Income Tax Assessed  

A client migrated from Singapore brought approximately $500,000 from the country after the cancellation of the account from the country’s social welfare fund (Central Provident Fund), and the amount was fully assessed as “taxable income”  by the ATO with the Commissioners view that the amount was withdrawn from a foreign-based trust, hence it is an assessable income to the taxpayer. Our objection successfully argued against the Commissioner’s view followed by the amended assessment issued to the client, and the amount of tax was reduced to around $3000 from almost a quarter of a million dollars. 

Case 2 : Remission of Penalties and General Interest Charges

A client with a history of a medical symptom was charged a heavy penalty due to failure to attend his tax returns for a number of years. With the information gathered with the client, we successfully removed the whole penalty as well as the General Interest Charges imposed on her.

Case 3 : Voluntary Disclosure for Foreign Income 

A client with bank accounts and business structure in Hong Kong failed to declare the income earned there and the existence of the business structure in Hong Kong. As the ATO has more power to access this information from overseas including bank account details, the client came to our office to resolve his tax matter with minimum financial damages. With our submission to the Commissioner, the ATO was satisfied to accept the voluntary disclosure without imposing any penalties on our client.

Case 4 : ATO Audit for income tax deduction claims 

A client claimed tax deductions for her clothing and cosmetics expenditure for over a number of years, and the ATO audited the case. With the taxpayer failed to satisfactorily build her arguable position with proper substantiation, the Commissioner issued the amended assessments denying all her claims for the tax deduction. Our office submitted the objections for the assessments with legal arguments and secured some deductions allowed for the client.

Case 5: Money received from overseas

A client who was investigated by the ATO for the money ($2 million dollars) she received from overseas was resolved by us with sufficient evidence presented, and our legal arguments supported. She originally engaged with a Sydney based law firm with the advice given from them. She spent the professional fee of over $6,000 for the advice but without having any outcome. By the time the client approached our office, she was under immense pressure coming from the ATO. The matter was resolved within two weeks time with information we gathered from the client as well as the information we acquired through our network firm in Hong Kong for a company involving the money transfer.

Case 6: Tax audit for interest earned from overseas bank accounts

A client was under a tax review based on the information gathered by the ATO through AUSTRAC for the money held in overseas bank accounts. The original sum (over $10 million) was earned by a family while they were living in an overseas country but was held under the client’s name.  While the ATO is reviewing the case, the client left this country due to her ongoing medical treatments and stress coming from the matter. The matter was escalated to the audit by the ATO with mortgage assigned her son’s properties in Australia. Her son was also prevented to leave the country until the matter was resolved. The ATO assessed a tax plus heavy penalty over $3.5 million, and it soon became near $5 million due to General Interest Charges accumulated.

The matter was originally handled by a large accounting firm but without any progress made until the client moved to us. Over a year of time, we gathered the objective information and analysed the source of income and the owners of the money. We even travelled to an overseas country to interview our client. We also stopped the sale of Australian properties by the ATO by arranging a deposit.

Finally, with intense legal arguments with strong evidence supported, the matter was settled with the ATO at about $1 million. The mortgage on the properties is now released, and the client’s son is now able to travel outside Australia.

Case 7: Tax audit settled for a company  running multiple cafes

A Sydney based company that runs six cafés in Sydney CBD was under tax audit by the ATO from November 2016 as part of the ATO’s task force to tackle cash businesses. Despite the fact that the company’s account was relatively well maintained by a Chartered firm, the ATO was not convinced by the company’s MYOB,  and the ATO officers rather tried to build their own calculation of income using so-called the “indirect method”. Under the circumstances there is not sufficient information available to support the account, the application of this method is common to bring the sales figure after the calculation of the costs of goods sold with multiples applied for each sales item. Eventually, the ATO issued the position paper with a $900,000 tax bill to the company including heavy penalties.

After engaging with the company and its director, our office finally settled with the ATO for the amount of $135,000 with convincing evidence of proper cost calculations followed by the near correct sales figures of the company. Our office also helped the company to implement a better internal control system to minimise the audit risks.

Case 8: Income Tax Objection for Poker Winning Money

A taxpayer in Sydney was under tax audit by the ATO for the money he earned from online poker games over the years.  After the lengthy audit, the ATO finally assessed the money as assessable income and imposed income tax almost $200,000. The taxpayer argued that the money he earned from the online poker game must be tax-free, therefore, it should not be assessed. The ATO, however, argued that he was effectively earning business income as a professional gambler; therefore, the money he earned from the gambles must be included as business income. Though there were some ambiguities and hurdles to get all the information our office needed to defend the taxpayer’s position, we successfully objected the ATO’s decision with our arguments saying the ATO’s argument did not support its decision that the taxpayer conducted any form of business and eventually removed the amount of tax imposed after the tax audit. 

Case 9: Tax Audit for the payments to contractors

A boutique massage business in the heart of Melbourne CBD was under an investigation by the ATO for its payments to the contracted massage workers. The business hired some massage workers as employees and some as contractors. Those hired as contractors issued tax invoices to the business based on the hours worked to deliver the massage services to the customers of the business. During the audit, the ATO argued that those contractors must be deemed as employees of the business as they did not work as independent contractors. Therefore, the business was responsible for collecting the PAYG Withholding Tax and paying the Superannuation Guarantees that were calculated over a half-million dollars. 

Once engaged, our office attended multiple meetings with the auditors from the ATO as well as attending reviews of information before the taxpayer supplied to the ATO. Although the decision making was taken quite some time by the ATO after our initial submission, the matter eventually ended in favour of the taxpayer acknowledging the most of the massage workers worked as independent contractors. 

Case 10: Superannuation Guarantee Payment Audit resolved with no penalties 

Well-known franchise business in Sydney was under the Superannuation Guarantee Payment Audit by the ATO in the middle of the 2020 income year. After the completion of the audit for the late paid and unpaid SGC, the employer was imposed 200% of the Part 7 Penalties. The first 100% of the penalty was remitted by the ATO considering the employer’s voluntary disclosure and the business’s financial position under the COVID-19, but the remaining balance of the 100% penalty was still very substantial for the employer. Once engaged with Australian Tax Experts, our team successfully convinced that the amount of the penalty was too harsh for the employer, and we argued the penalty should be fully remitted under the circumstances that the employer was fully cooperating with the ATO and never had any history of non-compliance for its taxation side. The ATO finally remitted the full penalties on the matter. 

     Case 11: Objection against Private Ruling  Decision

A taxpayer with dual citizenship in Australia and the UK was living in the UK for more than 3 years and sold her house in Sydney while she was in the UK. Although she believed she was an Australian resident for tax purposes, her accountant asked her to submit a Private Ruling over her residency.

The ATO considered her residency for tax purposes and decided that she was a foreign resident for tax purposes because she was a UK citizen and was living in the UK for more than 3 years. Because it was a binding ruling for her, she had to file the tax return as a non-resident with a large amount of capital gains tax for the gain she made from the sale of the property in Sydney (over $350,000).

After we found the reasonably arguable position from the decision, our office submitted an objection to the ATO with supporting evidence saying she was a resident for tax purposes based on the domicile test. After three months of exchange of further communications between our office and the ATO, the ATO finally accepted our argument and allowed the objection in full. Subsequently, the taxpayer did not end up paying a large amount of capital gains tax applying for the main residence exemption with the 6 years rule, which saved her a fortune.