Penalties for Falsely Amended Tax Returns

Hello Chasers,

It is never a good idea to take action without proper consultation or advice.

The Administrative Appeals Tribunal (‘AAT’) recently affirmed the ATO’s decision to impose shortfall penalties on a taxpayer who had lodged false amended income tax returns.

The taxpayer had lodged income tax returns for the 2020 and 2021 income years through her tax agent. The taxpayer subsequently lodged amended returns to claim deductions regarding a non-existent family trust for those years.

She did not consult her tax agent before doing so.

Following an audit, the ATO advised the taxpayer that she had no entitlement to the deductions claimed, and it imposed shortfall and administrative penalties.

The AAT concluded that the conduct of the taxpayer was reckless, and in lodging her amended tax returns without the knowledge of her tax agent, the taxpayer had not taken reasonable care. 

The AAT accordingly affirmed the ATO’s decision to impose shortfall and administrative penalties on the taxpayer.

Individuals and sole traders generally have 2 years to submit an amendment to their tax return. This time starts from the day after your notice of assessment is sent to you. For example, if the date on your individual notice of assessment is 1 November 2024, your amendment period starts on 2 November 2024. That means you have until 1 November 2026 to request an amendment to your tax return.

If you believe that you have a strong case for amending prior year returns, please contact our office on 03-55612643 to get advice on whether you have a strong case.

Have a great day!

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