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2021 Local Tax Club – How taxpayers can discharge their burden of proof (Melbourne)

Published on 28 Oct 2021 | Took place at Leonda by the Yarra, VIC

This session provided a roadmap to limiting factual issues disputed by the Commissioner in audits, reviews, litigation and other processes (e.g. PBRs) both before and after engagement with the Commissioner. The Full Federal Court decision of Steward J Greenwood J agreeing and Logan J concurring with additional reasons) in Commissioner of Taxation v Cassaniti [2018] FCAFC 212 (Cassaniti) notably clarifies the law in relation to what is necessary for a taxpayer to discharge their burden of proof on review in a Tribunal or Court. The practical effect of this clarification may be that taxpayers are more likely to succeed in meeting their burden of proof on review.

For corporations, both large and small, the decision highlights the operation of s 1305 of the Corporations Act 2001 (Cth) (Corporations Act) which may have the effect of practically discharging the burden of proving underlying facts if the matters are recorded in the financial records [1] of a company. This should have the effect of making the process on review quicker, more certain and consequently cheaper for litigants. For individuals and SMEs, the commentary on what is necessary to meet the burden of proof will assisting them in preparing matters so as to discharge their burden of proof where record keeping was not flawless (for example, in SMEs, trust and intra-family dealings). For larger taxpayers, there is also an opportunity to utilise elements of the decision to reduce the scope of dispute as to material facts which could also have the effect of greatly reducing the cost and duration of disputed facts in Court.

Individual sessions

How taxpayers can discharge their burden of proof

Author(s):  Gareth Redenbach

This paper covers a roadmap to limiting factual issues disputed by the Commissioner in audits, reviews, litigation and other processes (e.g. PBRs) both before and after engagement with the Commissioner.

Materials from this session: