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Edited version of private ruling
Authorisation Number: 1011573049114
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Ruling
Subject: Period of review and amendments
Can the Commissioner amend income tax assessments for the years ended 30 June 1997 to 30 June 2004 that issued more than four years ago, to increase the tax liability of the taxpayer, where there has been no fraud or tax evasion, under section 170 of the Income Tax Assessment Act 1936 (ITAA 1936)?
No.
This ruling applies for the following periods:
1 July 1996 to 30 June 2004
Facts
The deceased was a non-resident taxpayer of Australia at date of death.
The deceased had an investment property located in Australia.
A person was appointed legal personal representative by Power of Attorney. It has come to their attention that the deceased income tax returns have not recorded net rental income in relation to the investment property for a period prior to 30 June 2004.
The actual rental income and expenses figures for the period are unavailable from the managing real estate agent.
The legal personal representative is questioning whether a statutory review limit of four years applies to requesting amendments for the years ended 30 June 1997 to 30 June 2004 that was issued more than four years ago.
The tax agent confirmed there has been no fraud or evasion.
Relevant legislative provisions
Income Tax Assessment Act 1936 Section 170.
Reasons for Decision
Section 170 of the Income Tax Assessment Act 1936 (ITAA 1936) limits the Commissioners ability to process amendments that would increase a taxpayers liability. Generally the Commissioner is limited to four years from the date upon which tax fell due on the original assessment, or two years for a shorter period of review taxpayer. For an amendment requested under self assessment the Commissioner is limited to the four years. This period can be extended in limited circumstances, for example, where the understatement was due to fraud or evasion.
In this case, a four year review period would apply, therefore the Commissioner is unable to amend the assessments for the years ended 30 June 1997 to 30 June 2004 where there has been no fraud or evasion.
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