Your group has formed an Accounting Practice business partnership. Your area of expertise is in Income Tax matters in Australia. Jonathan is one of your clients and he has come to see you seeking advice on how to minimize his tax. You explain to Jonathan of the many ways in which to reduce his tax liability. Jonathan is most impressed by what you have told him and he pays a fee for your professional advice and then carries out your suggestions on tax minimisation. Unfortunately, you have misread the tax legislation and as a result Jonathan is audited by the Australian Taxation Office who then issues him with a tax liability of $600,000.00 plus interest.

Your group has formed an Accounting Practice business partnership. Your area of expertise is in Income Tax matters in Australia. Jonathan is one of your clients and he has come to see you seeking advice on how to minimize his tax. You explain to Jonathan of the many ways in which to reduce his tax liability. Jonathan is most impressed by what you have told him and he pays a fee for your professional advice and then carries out your suggestions on tax minimisation. Unfortunately, you have misread the tax legislation and as a result Jonathan is audited by the Australian Taxation Office who then issues him with a tax liability of $600,000.00 plus interest.

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter2: Working With The Tax Law

Section: Chapter Questions

Problem 28P

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Mr A has formed an Accounting Practice business partnership. Your area of expertise is in Income Tax matters in Australia. Jonathan is one of your clients and he has come to see you seeking advice on how to minimize his tax. MR A explains to Jonathan of the many ways in which to reduce his tax liability. Jonathan is most impressed by what MR A has told him and he pays a fee for his professional advice and then carries out Mr A's suggestions on tax minimisation. Unfortunately, MR A has misread the tax legislation and as a result Jonathan is audited by the Australian Taxation Office who then issues him with a tax liability of $600,000.00 plus interest. Discuss what the consequences are to MR A for giving Jonathan bad advice.
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