MEMBER 216 writes:
"A warning about the Notices of Assessment for Excess Contributions Tax. We received an assessment notice last week for a client. We had previously received the initial letter advising the contributions and that they may exceed the cap. We checked the contributions at the time and discussed with the client the tax outcome etc. In this case the client exceeded their concessional cap. However, they had already reached their non-concessional cap, so the excess will create both excess concessional and non-concessional tax payable. The contributions exceeded the cap by around $15,000, therefore we expected a total tax amount of around $11,500.
However, it appears that the notices of assessment must be manually prepared. The excess non-concessional contributions had been entered with an extra zero. The notice shows excess concessional contributions of $15,000 and excess non-concessional contributions of $150,000!!! A tax bill of $75,000. 40 minutes on the phone explaining that there must be a typo."