Tax administration 2012

Voluntary disclosure: Reasonably arguable position

Source: Taxation In Australia Journal Article

Published Date: 1 Aug 2012


In general terms, where there is a tax shortfall in the absence of reasonable care being taken, a penalty must be imposed, unless the Commissioner accepts that a reasonably arguable position was adopted. The system of imposing administrative penalties relies on an assessment of the behaviour of the taxpayer and, by imputation, the taxpayer’s tax agent. This is usually undertaken by a public servant, who has no knowledge of the taxpayer’s circumstances. This assessment gives rise to a rate, and therefore amount, of administrative penalty. The Commissioner can then, depending on the way in which the shortfall was determined, increase or reduce the penalty.

This article focuses on the process of assessment, reduction and remission of administrative penalties. The first part of the article deals with the uniform administrative penalty regime, with a focus on the voluntary disclosure regime. The second part discusses practical strategies to obtain reductions in penalties and interest charges.

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Tax administration 2012

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