Burton v Commissioner of Taxation

The High Court of Australia heard an appeal by Mr. Burton against a decision of the Federal Court of Australia, which had affirmed a notice of assessment issued by the Commissioner of Taxation. The dispute concerned the Commissioner's assessment of additional income tax and penalties against Mr. Burton, arising from his failure to disclose certain foreign income and assets in his tax returns.

The central legal issue before the High Court was whether Mr. Burton had a reasonable excuse for his failure to lodge his tax returns and disclose his foreign income and assets as required by the *Income Tax Assessment Act 1936* (Cth) and the *Income Tax Assessment Act 1997* (Cth). Specifically, the Court had to consider the interpretation of "reasonable excuse" in the context of a taxpayer's reliance on advice from their accountant.

Kiefel CJ and Edelman J, in their joint judgment, reasoned that for reliance on professional advice to constitute a reasonable excuse, the taxpayer must demonstrate that they provided all relevant information to the advisor and that they genuinely relied on the advice received. The Court found that Mr. Burton had not discharged this onus. While he had engaged an accountant, the evidence did not establish that he had provided complete and accurate information regarding his foreign income and assets, nor that he had specifically sought advice on his disclosure obligations in relation to those matters. The Court reiterated the principle that a taxpayer cannot delegate their responsibility to comply with tax laws to an advisor and then claim a reasonable excuse based on the advisor's error or omission, particularly where the taxpayer's own conduct in providing information was deficient.

The High Court dismissed the appeal, upholding the decision of the Federal Court and affirming the Commissioner's assessment.