Masters and Commissioner of Taxation (Taxation)

The Administrative Appeals Tribunal considered an objection decision by the Commissioner of Taxation concerning Mr Masters' income tax assessment for the year ended 30 June 2012, and a related administrative penalty. Mr Masters bore the onus of proving that the amended assessment was excessive and that the penalty decision was incorrect or should have been made differently.

The Tribunal was required to determine which of Mr Masters' claimed deductions were allowable, specifically in relation to his work-related motor vehicle expenses, work-related travel expenses, self-education expenses, and other work-related expenses. Additionally, the Tribunal had to consider whether the Commissioner's decision regarding the administrative penalty, specifically the failure to take reasonable care, was correct, and whether any part of that penalty should be remitted.

The Tribunal accepted expert evidence that a law degree, which Mr Masters possessed, was relevant to his role as a Vendor Relationship Manager, particularly in managing complex contractual and commercial engagements in regulated industries. Based on this, the Tribunal allowed some, but not all, of the disputed deductions claimed by Mr Masters. However, the Tribunal agreed with the Commissioner's decisions regarding the administrative penalty, finding no basis to exercise its discretion to remit any part of the penalty that was properly payable.

Consequently, the Tribunal set aside the Commissioner's objection decision in relation to the amended income tax assessment and remitted the matter to the Commissioner for reassessment in accordance with the Tribunal's reasons. The Tribunal affirmed the Commissioner's objection decision relating to the administrative penalty, which was to be recalculated based on the revised tax shortfall.