Davy and Commissioner of Taxation (Taxation)

This matter concerned an appeal by Mr. Davy against amended assessments issued by the Commissioner of Taxation for the 2011 and 2012 income years, and against the imposition of an administrative penalty. The dispute centred on Mr. Davy's claims for work-related travel expenses. The decision was made by Senior Member Egon Fice of the Tribunal.

The primary legal issues before the Tribunal were whether Mr. Davy had discharged the onus of proving that the Commissioner's amended assessments were excessive, and whether the substantiation exceptions provided for in Subdivision 900-B of the *Income Tax Assessment Act 1997* (ITAA 1997) applied to his claims. Additionally, the Tribunal considered whether Mr. Davy and his tax agent, Mr. Fumberger, were reckless in making the deduction claims, which would justify the imposition of an administrative penalty.

The Tribunal found that Mr. Davy had failed to discharge the onus of proof. This failure stemmed from his lack of records for work-related travel expenditure incurred while away from home overnight for his employment as a truck driver. Consequently, the Tribunal determined that the substantiation exemptions under section 900-50 of the ITAA 1997 did not apply, as Mr. Davy could not demonstrate the basis for his claims, that the expenses were actually incurred, or that they were for work-related purposes. The Tribunal accepted the amounts allowed by the Commissioner as reasonable in the absence of substantiating evidence. Furthermore, the Tribunal found both Mr. Davy and Mr. Fumberger to have been reckless in making the deduction claims, noting that Mr. Fumberger's conduct fell significantly short of the expected standard for a registered tax agent.

Accordingly, the Tribunal affirmed the Commissioner's objection decision regarding Mr. Davy's taxable income for the 2011 and 2012 income years, and affirmed the Commissioner's decision to impose a 50% administrative penalty on the shortfall amount.