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Edited version of your written advice
Authorisation Number: 1012762268637
Ruling
Subject: Managing tax affairs
Question
Are you entitled to a deduction for the accounting fees incurred?
Answer
Yes.
This ruling applies for the following periods:
Year ended 30 June 2012
The scheme commences on:
1 July 2011
Relevant facts and circumstances
You received assessments.
You appointed the services of a tax agent to object to the assessments.
You incurred accounting fees in order to lodge the objection.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 25-5
Reasons for decision
Section 25-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that a taxpayer can deduct expenditure they incur to the extent that the expenditure is for managing tax affairs.
Section 25-5 of the ITAA 1997 does not specify what constitutes managing tax affairs. However, it is considered that it includes activities required to prepare income tax returns.
In your case, you incurred accounting fees in order to object to an assessment. It is considered that the expenses are in relation to managing your tax affairs as it is associated with the preparation of your tax return. Therefore, you are entitled to a deduction for the accounting fees incurred.
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