ATO Interpretative Decision
ATO ID 2003/955 (Withdrawn)
Income Tax
Income Tax Deductions: cost of managing tax affairs - deductibility of tax return preparation training courseFOI status: may be released
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This ATO ID is withdrawn as guidance on this issue can be found on the ATO website under Cost of managing tax affairs. (QC 31959)This document incorporates revisions made since original publication. View its history and amending notices, if applicable.
This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Can the taxpayer claim the cost of a tax return preparation course as a cost of managing the taxpayer's tax affairs under section 25-5 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Decision
Yes. The taxpayer can claim the cost of a tax preparation course as a cost of managing their tax affairs under section 25-5 of the ITAA 1997.
Facts
The taxpayer is a wage earner. The taxpayer also carries on some investment activities. The taxpayer attends a tax return preparation course that covers the tax treatment of these investments. The taxpayer's attendance at this course assists in preparing their tax return.
Reasons for Decision
All legislative references are to the ITAA 1997 unless otherwise stated.
Section 25-5 provides that certain tax-related expenses are deductible.
Paragraph 25-5(1)(a) provides that a taxpayer can deduct expenditures they incur to the extent that the expenditure is for managing tax affairs.
The expression 'tax affairs' is defined in section 995-1 as 'affairs relating to tax' but the Act does not define the meaning of 'managing tax affairs'.
It is considered that, for the purposes of section 25-5, managing tax affairs includes activities required to prepare income tax returns.
The taxpayer attends a tax return preparation course which provides information to assist the taxpayer in preparing their tax return. The cost of the tax preparation course is a cost associated with preparing the taxpayer's tax return, and therefore is deductible as a cost of managing their tax affairs under section 25-5.
Date of decision: 10 October 2003Year of income: Year ended 30 June 2003
Legislative References:
Income Tax Assessment Act 1997
section 25-5
Keywords
Dividend income
Rental property income
Tax advice expenses
Tax related expenses
Date reviewed: 4 May 2016
ISSN: 1445-2782
| Date: | Version: | |
| 10 October 2003 | Original statement | |
| You are here | 31 May 2019 | Archived |