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Voluntary disclosure: Reasonably arguable position


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.

Author profile

Arthur Athanasiou CTA-Life
Photo of author, Arthur ATHANASIOU Arthur Athanasiou CTA (Life) practises mainly in the area of taxation advisory, with an emphasis on dispute resolution, particularly in the SME sector, with both the ATO and the SRO. Arthur has many years experience in complex tax litigation and tax audit negotiations and settlements. He also has broad experience in the taxation of trusts and SME entities, with an emphasis on Div 7A and high wealth individuals and family groups. Arthur has qualified as a Chartered Accountant and also held senior taxation and management positions in the transport and motor vehicle industries. Arthur is a former President of The Tax Institute, has chaired the Law Institute’s Tax Law Advisory Committee for a decade and now serves on the Industry Advisory Board of the IPA-Deakin University SME Research Centre. Arthur is an Accredited Tax Law Specialist and a widely published writer on taxation issues. He regularly appears in the mainstream media and presents at tax seminars and discussion groups. - Current at 21 September 2018
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