Cheryl, a single resident taxpayer, is employed as an elite full-time soccer referee and claims that...
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Cheryl, a single resident taxpayer, is employed as an elite full-time soccer referee and claims that she plays video games for 'practice in making decisions. In her 2019/20 income tax return, Cheryl disclosed taxable income of $153,000 after claiming video game expenses of $1,500. Cheryl is also subject to the Medicare Levy Surcharge (Tier 3). Cheryl has been penalised previously following an audit of her 2015/16 income tax return. Calculate the likely penalties that would be imposed on Cheryl if the resulting shortfall were uncovered during ATO audit activity. QUESTION (Calculation of base penalty amount) During an audit of his 2019/20 income tax return, Selwyn Vasic was found to have omitted $10,000 of assessable income. The tax return originally lodged by Selwyn disclosed taxable income of $125,000. Selwyn has adequate private health insurance. Calculate the likely penalties that would be imposed on Selwyn if the shortfall was the result of: • A lack of reasonable care to comply with taxation law; • Recklessness as to the operation of taxation law; • Intentional disregard of taxation law. QUESTION (Adjustment of base penalty amount) Toni Pearshape incorrectly included a deduction of $2,100 for repairs to her investment property (it should have been $1,200). The taxable income disclosed on her 2019/20 tax return (including the incorrect deduction) was $82,000. This error has come to light as the result of a tax audit. (a) Calculate the shortfall amount that resulted from her error. (b) Would the Commissioner be likely to penalise Toni for making a false or misleading statement? (c) If the Commissioner finds that the shortfall is the result of a lack of reasonable care', how much will Toni have to pay in tax and penalties? (d) If Toni became aware of the error during the audit, how much will the penalty be if: (1) She tries to conceal the source documents from the tax auditor? She immediately notifies the tax auditor that she has made an error? (ii) Cheryl, a single resident taxpayer, is employed as an elite full-time soccer referee and claims that she plays video games for 'practice in making decisions. In her 2019/20 income tax return, Cheryl disclosed taxable income of $153,000 after claiming video game expenses of $1,500. Cheryl is also subject to the Medicare Levy Surcharge (Tier 3). Cheryl has been penalised previously following an audit of her 2015/16 income tax return. Calculate the likely penalties that would be imposed on Cheryl if the resulting shortfall were uncovered during ATO audit activity. QUESTION (Calculation of base penalty amount) During an audit of his 2019/20 income tax return, Selwyn Vasic was found to have omitted $10,000 of assessable income. The tax return originally lodged by Selwyn disclosed taxable income of $125,000. Selwyn has adequate private health insurance. Calculate the likely penalties that would be imposed on Selwyn if the shortfall was the result of: • A lack of reasonable care to comply with taxation law; • Recklessness as to the operation of taxation law; • Intentional disregard of taxation law. QUESTION (Adjustment of base penalty amount) Toni Pearshape incorrectly included a deduction of $2,100 for repairs to her investment property (it should have been $1,200). The taxable income disclosed on her 2019/20 tax return (including the incorrect deduction) was $82,000. This error has come to light as the result of a tax audit. (a) Calculate the shortfall amount that resulted from her error. (b) Would the Commissioner be likely to penalise Toni for making a false or misleading statement? (c) If the Commissioner finds that the shortfall is the result of a lack of reasonable care', how much will Toni have to pay in tax and penalties? (d) If Toni became aware of the error during the audit, how much will the penalty be if: (1) She tries to conceal the source documents from the tax auditor? She immediately notifies the tax auditor that she has made an error? (ii)
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Cheryls Penalty Calculation Cheryl disclosed taxable income 153000 Video game expenses claimed 1500 ... View the full answer
Related Book For
South Western Federal Taxation Individual Income Taxes 2017
ISBN: 9781305873988
40th Edition
Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young, Nellen
Posted Date:
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