Won my court case against the ATO :)

dtraeger2k said:
Ouuuuuuuchhhhhh :eek:

Just did my 2012-13 tax return and its awful.:mad:

I paid 15k tax during the year via income tax. I had a few misc deductions, nothing major.

Result = Pay an additional $15k! :eek::eek:

This is because the overturning of the 2008 decision (written about in the OP) caused the interest on the ATO debt to be refunded to me, which is taxable income.

This hardly seems fair, given
a) I didnt pay any of the interest (it just acrued on the outstanding value until the matter was resolved), nor did any interest come back to me, was just a paper transaction
b) The matter was resolved with the decision that the debt shouldnt have existed in the first place since I had a CGT exemption, therefore the interest shouldnt have existed, right?
Click to expand...

You can always take them to court. :p
 
dtraeger2k said:
Might have to.

Interest that i didnt pay, wasnt refunded to me, and i have to pay tax on it? :rolleyes::confused:
Click to expand...

Did you have an accountant do it? It doesn't seem quite right does it? Generally you get to claim the interest in your tax as a loss so if that had been done then you would have been at 0 now.
I think you can query this via your accountant.
 
Jeez dtraeger2k they didn't take that loss well.

Don't mention me when you talk to the ATO. Otherwise they might question my fishing reel deductions. Although I spend enough money on it to be considered a professional.
 
I've tried emailing and calling the lawyer bloke from the ATO I was dealing with previously. Both measures no longer exist so he's potentially left the organisation.

I've a feeling accountant declared the accrued interest as a deduction in the year it was accrued (even though i didnt pay it, capitalised), so thats why I need to declare it returning to me (even thought it hasnt) as income.

The resolution of the court case was to effectively wipe everything, including non-lodgement and late submission fines and interest that had acrued on the debt they wrongly accused me of having. So, I've asked the accountant the repercussions of un-claiming the interest and therefore un-declaring its return. I assume this is the only way forward at the moment since I can't speak to my contact at the ATO and i refuse to explain the situation to a phonejockey, hopefully the accountant will have someone inside he can reach out to. Otherwise, a colleague of mine has given me details of a tax lawyer.

Awaiting response :)
 
Still no email reply or return call from Accountant. I think im in the market for another who knows how to reply in a timely manner. Preferably in Perth if anyone has any recommendations?

It'd be difficult to handover all the ongoing information on this case to another accountant, though?

I dont want to contact the ATO regarding the issue because I'll just get some call centre pleb who won't know anything. I tried to contact the ATO's lawyer who i dealt with on this matter previously but his number no longer works :(

Suggestions?
 
dtraeger said:
Ouuuuuuuchhhhhh :eek:

Just did my 2012-13 tax return and its awful.:mad:

I paid 15k tax during the year via income tax. I had a few misc deductions, nothing major.

Result = Pay an additional $15k! :eek::eek:

This is because the overturning of the 2008 decision (written about in the OP) caused the interest on the ATO debt to be refunded to me, which is taxable income.

This hardly seems fair, given
a) I didnt pay any of the interest (it just acrued on the outstanding value until the matter was resolved), nor did any interest come back to me, was just a paper transaction
b) The matter was resolved with the decision that the debt shouldnt have existed in the first place since I had a CGT exemption, therefore the interest shouldnt have existed, right?
Click to expand...

So heres whats transpired since the above quoted post:
1) Due to having no contact with accountant, I contacted another (from a well respected firm that posts on these forums) who passed on taking it on.
2) End up getting in contact with my accountant, he thinks it isnt going to go anywhere as ATO's decision is final, but i refuse to believe this.
3) Today I spent my entire lunch break on the phone to ATO call centre trying to squeeze some logic out of them. They appear to have none. They believe that the interest (GIC) being remitted back to me is assessible income, regardless of whether or not it was charged as a deduction in previous years.

My logic basically is:
a) They charged me money, then decided not to charge me money anymore, why should the latter be taxable?
b) They should have wiped the original charge instead of remitting it. Accounting journal error i think?

The instructions from ATO's lawyer at the end of the case (Ive tried to contact him but his number is disconnected) was that "it'll be like it never happened" (which plays into point b above). The actual outcome document doesnt actually mention it, it says "Reduce CGT payable from X to X, accept rental estimate of X, allow rental deductions of X". There's no mention of what happens to GIC or Fines due to what the ATO lawyer said about them.

I've contacted the tribunal to say that ATO hasn't followed the Tribunal's outcome correctly. Will see what comes of it.

I've also been given the direct number of the ATO staffer in Melbourne who handled this case before it turned into what it is now. Not sure if she can do anything, but might be worth a call.
 
dtraeger said:
1) Due to having no contact with accountant, I contacted another (from a well respected firm that posts on these forums) who passed on taking it on.
Click to expand...

Don't a lot of Accountants get their Legal Tax Advice from Gaydens and other firms?

Can the Forum Accountants suggest someone?

Failing that you could talk or engage TerryW for advice :confused:
 
westminster said:
Never say never but if it was claimed earlier then get that reversed if possible

http://www.ato.gov.au/General/Corre...-ATO-decision/?anchor=P1240_79549#P1240_79549

Dispute it and get a proper resolution

or seek a Remission in the charges?

http://www.ato.gov.au/General/Corre...est-charges/?anchor=P1836_117947#P1836_117947
Click to expand...

Yeah I've asked for the accountant to amend the previous claims of the GIS charge deductions but he keeps avoiding the question. I think there's only a certain duration this can be done for, but given the nature of the case some leeway should be given.

The woman i spoke to at the ATO call centre said its irrelevant whether the interest was claimed as a tax deduction or not, the remission of which still counts as income.

Edit - I havent lodged the 2013 return yet. Maybe I should so that I have something to dispute against? Terry W or some other professional want to weigh in here?
 
dtraeger said:
The woman i spoke to at the ATO call centre said its irrelevant whether the interest was claimed as a tax deduction or not, the remission of which still counts as income.
Click to expand...
Of course she did, vested interest, her pay comes from taxes scraped from the unwilling hands of people who actually accomplish something
They are already wrong once, that's the title of this thread

ATO is synonymic of snafu
 
Last edited:
Another acronym, that is also applicable to the ATO
Bohica
bend over here it comes again

income:noun: non-repayment of interest not collected, BOHICA
 
i'm not an accountant and maybe this is silly suggestion, but can't you amend previous tax return to show interest you would've had to pay as a loss?
 
Strannik said:
i'm not an accountant and maybe this is silly suggestion, but can't you amend previous tax return to show interest you would've had to pay as a loss?
Click to expand...

1) I didn't pay any of the interest, just let it accrue until there was an outcome made at the Tribunal to reduce/remove it.
2) ATO says its irrelevant whether the interest was deducted in previous years as remitting it is accessible either way.

So basically what happens is (assuming 50% tax bracket for ease of example)
* They charge me $50 (on 'paper'), I don't pay it.
* They charge me $5 interest on that $50, i claim $2.50 of which as a deduction
* They reduce their $50 to $10 due to winning the tribunal case, so remit (on 'paper') $40 back to me
* $40 gets added to my taxable income, so have to pay tax this year of $20 (a fair bit different from the benefit of $2.50)
 
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