Diarra and Commissioner of Taxation (Taxation)

The Administrative Appeals Tribunal considered an application by Mr. Diarra for review of a decision by the Commissioner of Taxation concerning an administrative penalty. The dispute centred on whether Mr. Diarra had taken reasonable care in fulfilling his taxation obligations, specifically in relation to the preparation and lodgement of his tax returns for the 2011 and 2012 income years. The Tribunal noted that the safe harbour provisions were not applicable as Mr. Diarra had not engaged a Registered Tax Agent.

The primary legal issue before the Tribunal was whether the penalty imposed by the Commissioner for Mr. Diarra's failure to take reasonable care was excessive and, if so, whether it should be remitted. This required the Tribunal to assess the circumstances surrounding Mr. Diarra's lodgement of his tax returns, including his personal background, educational attainment, language proficiency, employment situation, and the assistance he received in preparing his returns.

The Tribunal found that while Mr. Diarra had limited formal education and was a non-native English speaker, he had been employed in Australia for a significant period and had engaged an accountancy student to prepare his tax returns. Despite the student's assistance, the Tribunal was not satisfied that Mr. Diarra had taken all reasonable steps to ensure the accuracy of his returns, particularly given the substantial deductions claimed and the lack of documentary evidence to fully support his assertions about overseas remittances. The Tribunal concluded that the penalty imposed was not excessive and that there were no grounds for its remission.