ATO Interpretative Decision

ATO ID 2002/367 (Withdrawn)

Income Tax

Deductibility of Costs Incurred in Objecting to and Appealing against a Taxation Decision
FOI status: may be released

This ATO ID is withdrawn as it is a straight appliciation of the law and does not contain an interpretative decision.

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

Status of this decision: Decision withdrawn 18 July 2014

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

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you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed.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

Are costs incurred in lodging an objection and appealing to the Administrative Appeals Tribunal deductible under paragraph 25-5(1)(a) of the Income Tax Assessment Act 1997 (ITAA 1997)?

Decision

Yes. Costs incurred by the taxpayer in lodging objections against a taxation decision and appealing the matters to the Administrative Appeals Tribunal are deductible under paragraph 25-5(1)(a) of the ITAA 1997.

Facts

The taxpayer incurred expenditure regarding the lodging of objections. The taxpayer also incurred costs in appealing the unfavourable objection decisions to the Administrative Appeals Tribunal.

The taxpayer has incurred costs for professional advice and representation, gathering evidence, postage and telephone charges.

Reasons for Decision

Paragraph 25-5(1)(a) of the ITAA 1997 permits taxpayers to claim a deduction for expenditure that is incurred in managing their taxation affairs. Section 995-1 of the ITAA 1997 defines the term tax affairs as meaning affairs relating to tax. The taxpayer is entitled to claim a deduction for the costs that have been incurred in lodging the objections and taking the matter to the Administrative Appeals Tribunal under paragraph 25-5(1)(a) of the ITAA 1997. The costs would be deductible in the year in which they were incurred.

Date of decision: 5 February 2002.

Year of income: Year ended 30 June 2001 Year ending 30 June 2002

Legislative References:
Income Tax Assessment Act 1997
section 25-5
section 995-1

Keywords
Deductions & expenses
Objections
Compliance Costs
Tax agents services

Business Line: Private Groups and High Wealth Individuals

Date of publication: 28 March 2002

ISSN: 1445-2782

history

	Date:	Version:
	5 February 2002	Original statement
You are here →	18 July 2014	Archived

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