McKenzie and Commissioner of Taxation (Taxation)

[2019] AATA 77

McKenzie and Commissioner of Taxation (Taxation) [2019] AATA 77 (31 January 2019)

Administrative Appeals Tribunal

ADMINISTRATIVE APPEALS TRIBUNAL               )

)No: 2018/0844; and

TAXATION & COMMERCIAL DIVISION                  )  2018/0845

Re: Paul McKenzie
Applicant

And: Commissioner of Taxation
Respondent

DIRECTION

TRIBUNAL:	Deputy President Gary Humphries AO
DATE OF CORRIGENDUM:	28 February 2019
PLACE:	Canberra

The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975, to alter the text of the decision in this application as follows:

1. ’2018’, appearing after ‘January’ on page 14, is changed to ‘2019’.

…………………………..………………….
Deputy President Gary Humphries AO

Division:TAXATION & COMMERCIAL DIVISION

File Number(s):      2018/0844; and 2018/0845

Re:Paul McKenzie

APPLICANT

AndCommissioner of Taxation

RESPONDENT

DECISION

Tribunal:Deputy President Gary Humphries AO

Date:31 January 2019

Place:Canberra

The reviewable decision of the Commissioner of Taxation dated 8 February 2018 is affirmed.

........................................................................
Deputy President Gary Humphries AO

Catchwords

TAXATION – income tax assessments – whether the Applicant is entitled to deductions pursuant to s 8-1 of the Income Tax Assessment Act 1997 – whether the Applicant’s expenditure was incurred in the course of producing assessable income – whether the outgoing was private or domestic in nature – the mere fact of connection between expenditure and the derivation of income insufficient – distinction between the activity of getting to work and the activity of working – objection decision affirmed.

Legislation

Income Tax Assessment Act 1997 s 8-1

Taxation Administration Act 1953 ss 14ZZK

Cases

Commissioner of Taxation of the Commonwealth of Australia v Day [2008] HCA 53

Commissioner of Taxation v Cooper (1991) 29 FCR 177

Commissioner of Taxation v Payne (2001) 177 ALR 270

Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634

Fullerton v Commissioner of Taxation(1991) 32 FCR 486

Ronpibon Tin NL v Federal Commissioner of Taxation (1949) 78 CLR 47

U91 87 ATC 525

Secondary Materials

TR 95/17 Income tax: employee work-related deductions of employees of the Australian Defence Force

REASONS FOR DECISION

Deputy President Gary Humphries AO

31 January 2019

INTRODUCTION

1. This application for merits review by the Tribunal relates to whether Mr Paul McKenzie, then an employee of the Department of Defence, is entitled to claim tax deductions for relocation expenses incurred in the income years ended 30 June 2015 and 30 June 2016 (the relevant periods).

2. Mr McKenzie lodged income tax returns for the relevant periods in 2015 and 2016. In 2017 he commenced a correspondence with the Commissioner of Taxation (the Commissioner) concerning the deductibility of certain relocation expenses incurred in moving from Canberra to Perth, Western Australia. Mr McKenzie sought and obtained a private ruling in relation to those expenses from the Commissioner.

3. On 3 November 2017, he formally objected to the Notices of Assessments relating to the relevant periods, based on the Commissioner’s decision not to allow the deductibility of the relocation expenses. The Commissioner disallowed his objection on 8 February 2018 and on 22 February 2018 Mr McKenzie lodged an application for merits review with the Tribunal.

   RELEVANT FACTS

4. During the relevant periods, Mr McKenzie was employed as a public servant (EL1) at the Department of Defence (the Department). Between 2012 and 2015 a workplace dispute ensued involving the behaviour of one of Mr McKenzie’s colleagues. As a consequence of this, Mr McKenzie‘s mental health deteriorated. He called Mr John Cameron, his treating psychologist, to give evidence of that relationship between events in his workplace and the deterioration of his mental condition.

5. In late 2014, Mr McKenzie was arrested and charged with a domestic violence offence. He appeared before a magistrate on several occasions. On 24 March 2015, the Queanbeyan Local Court in NSW dismissed the charge against him, found that he was suffering from mental illness or… suffering from a mental condition for which treatment is available in the hospital and instead chose to deal with him in accordance with the provisions of Part 3 of the Mental Health (Forensic Provisions) Act 1990.[1] The court ordered that he be discharged into the care of his uncle in Perth.

   [1] In this decision, italicised text is generally used to indicate direct quotations.

6. Mr McKenzie claimed to have incurred expenses (airfares, vehicle transportation costs and removal costs) totalling $8,598.82 in relation to his relocation from Canberra to Perth. He claimed that they are work-related expenses and are tax deductible.

   LEGISLATION

7. Section 8-1 of the Income Tax Assessment Act 1997 (the Assessment Act) provides:

   General deductions

   (1)You can deduct from your assessable income any loss or outgoing to the extent that:

   (a)  it is incurred in gaining or producing your assessable income; or

   (b)  it is necessarily incurred in carrying on a * business for the purpose of gaining or producing your assessable income.

   Note: Division 35 prevents losses from non-commercial business activities that may contribute to a tax loss being offset against other assessable income.

   (2)However, you cannot deduct a loss or outgoing under this section to the extent that:

   (a)  it is a loss or outgoing of capital, or of a capital nature; or

   (b)  it is a loss or outgoing of a private or domestic nature; or

   (c)  it is incurred in relation to gaining or producing your * exempt income or your * non-assessable non-exempt income; or

   (d)  a provision of this Act prevents you from deducting it.

8. Section 14ZZK of the Taxation Administration Act 1953 (the Administration Act) provides:

   Grounds of objection and burden of proof

   On an application for review of a reviewable objection decision:

   (a)  the applicant is, unless the Tribunal orders otherwise, limited to the grounds stated in the taxation objection to which the decision relates; and

   (b)  the applicant has the burden of proving:

   (i)if the taxation decision concerned is an assessment--that the assessment is excessive or otherwise incorrect and what the assessment should have been; or

   (ii)in any other case--that the taxation decision concerned should not have been made or should have been made differently.

   CONTENTIONS

9. The issue before the Tribunal is whether Mr McKenzie is entitled to deductions pursuant to s 8-1 of the Assessment Act for his costs of relocation to Perth.

10. Mr McKenzie’s claim for tax deductibility is based on the contention that the deterioration in his mental health was caused by his employment and, in turn, this mental deterioration resulted in the making of the order of the Local Court requiring him to move to Perth to reside with his uncle. Because his move to Perth was mandatory, and was the product of his employment, the expenses he incurred in complying with the order are deductible expenses.

11. As I apprehend it, there are two bases for the claim of deductibility advanced by Mr McKenzie:

    (a)The circumstances of his employment led directly to the making of the court’s order, and therefore complying with the order, and incurring the expenses, was a loss or outgoing incurred in gaining or producing assessable income (per s 8-1(1)(a));

    (b)The Department, in bringing about the circumstances whereby he was required to transfer to Perth, effectively required the transfer as a condition of employment. The costs associated with the transfer are therefore deductible. This scenario is analogous to the compulsory transfer of an employee.

12. Conversely, the Commissioner contended that the question of deductibility for the expenses pursuant to s 8-1 requires consideration of:

    (a)whether the loss or outgoing was incurred in gaining or producing assessable income (the positive limb); and

    (b)whether the loss or outgoing was private or domestic in nature (the negative limb).

13. With respect to the positive limb, the Commissioner contended that a taxpayer must show there is a sufficient link or nexus between the loss or outgoing and the production of assessable income. Generally, in order to constitute a deduction, a loss or outgoing must be incurred in the course of gaining or producing assessable income. This requires the loss or outgoing:

    (a)to be incidental and relevant to the income producing activity; and

    (b)to have the essential character of an income producing expense.

14. In this regard the Commissioner argued that:

    (a)the incident relevant to the court order occurred outside of Mr McKenzie’s employment, and outside of any activity required by his employment; and

    (b)as the incident occurred in a private and domestic setting, the expense cannot be characterised as having the essential character of being income producing, irrespective of Mr McKenzie’s contention that had the expenditure not been incurred, his assessable income could not have been derived.

15. Even if the positive limb of s 8-1(1) were satisfied, the Commissioner contended that the relocation expenses should be characterised as of a private or domestic nature, pursuant to s 8-1(2)(b) (the negative limb). In support of this characterisation the Commissioner noted that:

    (a)The incident giving rise to the court order occurred in Mr McKenzie’s domestic environment;

    (b)It was this domestic incident which gave rise to the court order; and

    (c)Compliance with the order helped him avoid a criminal conviction in his personal capacity.

16. The expenditure is therefore private or domestic in nature, and thus not deductible, it was said.   

    CONSIDERATION

17. The Tribunal made orders during the hearing for the filing by Mr McKenzie of the transcript of his hearing in the Queanbeyan Local Court, in order to determine how best to characterise the factual findings of the learned magistrate and the nature of the order made. Mr McKenzie subsequently filed the transcript but the parties remained in dispute as to how best to characterise the court’s order.[2]

    [2] Mr McKenzie was given leave to make submissions to accompany the transcript, and the Commissioner was given leave to make a submission in response to the transcript and Mr McKenzie’s submissions. Mr McKenzie proceeded to lodge further submissions following the final submissions of the Commissioner. I have not taken into account submissions made outside the terms of the Tribunal’s orders.

18. The Commissioner, in a later submission, maintained that the transcript established that:

    (a)the decision to dismiss the charge of common assault and discharge Mr McKenzie into the care of his uncle was made by consent and, consequently, the magistrate was not required to make a finding in respect to Mr McKenzie’s mental health and its relationship with his employment; and

    (b)Mr McKenzie had already made his decision to relocate to Perth at some point prior to the order being made, so that the relocation – and the expenses associated with it – was not in fact a consequence of the order.

19. Mr McKenzie disputes this interpretation of the proceedings in the court. However, I do not regard it as necessary to resolve this dispute concerning the facts because, even if the version of events postulated by Mr McKenzie is accepted, the expenses do not qualify for deductibility.

20. In Ronpibon Tin NL v Federal Commissioner of Taxation (1949) 78 CLR 47 at 57 the High Court stated the general principle governing the operation of the predecessor provision to s 8-1:

    It is both sufficient and necessary that the occasion of the loss or outgoing should be found in whatever is productive of assessable income, or if none be produced, would be expected to produce assessable income. It is by this standard that the question raised by the recent cases must be determined.

21. In Commissioner of Taxation of the Commonwealth of Australia v Day [2008] HCA 53, the High Court considered the scope of s 8-1. That case concerned a public servant charged with breaches of the Public Service Act 1922, and the deductibility of his expenses in defending those charges. The majority’s analysis of which work-related expenses may qualify as losses or outgoings incurred in gaining or producing ... assessable income is enlightening. Gummow, Hayne, Heydon and Kiefel JJ, with Kirby J dissenting, observed:

    [21] The terms of s 8-1(1)(a) of the ITAA and its predecessors have not been regarded as materially different. They refer to a relationship between expenditure incurred and what is productive of assessable income, which is to say the connection necessary for deductibility. The words "incurred in gaining or producing ... assessable income", appearing in the section, have long been held to mean incurred "'in the course of' gaining or producing" income, as was observed in Payne. In Amalgamated Zinc (De Bavay's) Ltd v Federal Commissioner of Taxation, Latham CJ explained that it was necessary to read "losses and outgoings ... incurred in gaining or producing the assessable income" as incurred "in the course of" gaining or producing that income, in order to make the section intelligible. Outgoings may have an effect in gaining income, but losses cannot, as they simply reduce income. In Commissioner of Taxation v Cooper Hill J observed that an outgoing might be referable to a year of income other than that in which it was incurred. That was a reason why s 51(1) of the Income Tax Assessment Act 1936 (Cth) did not express the right to a deduction in terms of outgoings incurred to earn income. The words "in the course of" therefore facilitate the application of s 8-1(1)(a). They do not require a direct connection between the expenditure in question and an activity itself productive of income.

    [22] Dixon J in Amalgamated Zinc said that the expression "incurred in gaining or producing the assessable income" should be given a very wide application, although in that case the taxpayer company's continuing liability to pay monies to a compensation fund for miners it had employed lost any connection to assessable income when its business ceased. In Payne the majority confirmed that the words require more than a causal connection between the expenditure and the derivation of income; something closer and more immediate. The expenditure must be incurred "in the course of" gaining or producing the assessable income. Their Honours' reference to the words "in the course of" should not be taken to suggest a closer or more direct connection between expenditure and that which is productive of assessable income than the words of the provision themselves convey. Rather the words draw attention to the connection made necessary by the provision, which the majority considered on the facts of that case to be too remote.

    [23] Payne was concerned with expenses incurred by the taxpayer in travelling between his place of employment as a pilot and between the place where he conducted a deer farm. The majority held that the expenditure was not incurred in the course of either income-producing activity. Adapting the language of Ronpibon Tin, their Honours held that neither the taxpayer's employment nor the conduct of the business of a deer farm occasioned the outgoings for travel expenses. Rather they were occasioned by the need for the taxpayer to be in a position where he could set about the tasks from which income would be derived. The expenditure was incurred in the interval between income-earning activities. In Cooper, Hill J referred to an outgoing which preceded an income-earning operation or activity and which came at a point too soon to be an incident of, or relevant to, that activity. His Honour described the expenditure as referable to getting the work, rather than doing it.

    …

    [26] In Herald & Weekly Times Ltd v Federal Commissioner of Taxation it was held that a newspaper publisher's liability for defamation had the necessary connection to the business, publication being the common source of both revenue and the liability which gave rise to the expenditure. McTiernan J observed that only cessation of business would free the business from such expenditure. Gavan Duffy CJ and Dixon J distinguished the case from others by reference to the degree of connection present between the business carried on and what gave rise to the liability for damages. Their Honours referred to statements by Lord Loreburn LC in Strong & Co v Woodifield that such losses can be deducted as are connected with the business, in the sense that they are really incidental to the trade itself. The illustration provided by his Lordship was the deductibility of losses sustained by a railway company in compensating passengers for accidents whilst travelling with the railway. On the other hand injury caused to a man walking in the street by a window shutter falling from a house associated with a grocer's shop would not be deductible as an expense of the grocery business. And, as his Lordship observed, there will be cases at the margin.

    [27] Expenses of advertising, to counter press reports, and legal costs before a Royal Commission incurred by a company the subject of allegations as to its business practices were held to be deductible in Federal Commissioner of Taxation v Snowden & Willson Pty Ltd. Dixon CJ there identified the carrying on of the business as the source of the attacks and said that the taxpayer company "could do nothing else but defend itself, if it was to sustain its business". And in Magna Alloys and Research Pty Ltd v Federal Commissioner of Taxation, a case concerned more with the relevance of a taxpayer's subjective purpose in relation to the expenditure, the legal expenses paid by the company for the defence of its directors from criminal charges, relating to the receipt of secret commissions, were held deductible because they were incurred in carrying on the business. It may be thought that the directors' conduct there had qualities which might take it outside the scope of their proper tasks as directors. Nonetheless the connection with the taxpayer's business and the production of income is apparent.

    [28] Closer to the position of an employee are the decisions in Commissioner of Taxation v Rowe and Shokker v Commissioner of Taxation. In Rowe a shire engineer incurred legal expenses connected with an inquiry into complaints of his misconduct. A Full Court of the Federal Court held the expenses allowable as a deduction, but for reasons which differed in their identification of the connection with the taxpayer's employment. Beaumont J considered that it lay in the inquiry being concerned with the day-to-day aspects of his employment; Burchett J because they were expended defending the manner in which he had performed his duties; and Drummond J because they were incurred to preserve his existing contract of employment so that he could retain the recurrent benefit of his salary. In Shokker an employee of the Commissioner of Taxation had been charged with a criminal offence, in relation to his claim for sick leave in his employment. Drummond J considered that the factors that the charge was instigated by the employer, and that it could result in his dismissal, were matters to be taken into account in determining whether the necessary connection was present.

    …

    [30] Section 8-1(1)(a) is couched in terms intended to cover any number of factual and legal situations in which expenditure is incurred by a taxpayer. Its language and breadth of application do not make possible a formula capable of application to the circumstances of each case. Cases are helpful to show the connection found on the facts there present, but not always to explain how the search for the requisite connection is to be undertaken. Payne directs attention to the statement made in Ronpibon Tin, as to the question posed by a provision such as s 8-1(1)(a), as correct and appropriate to be applied. The question, as restated in Payne, is: "is the occasion of the outgoing found in whatever is productive of actual or expected income?" That inquiry will provide a surer guide to ascertaining whether a loss or expenditure has been "incurred in [the course of] gaining or producing ... assessable income".

    [31] Essential to the inquiry is the determination of what it is that is productive of assessable income. The dichotomy to which the Commissioner's argument refers, that between proper conduct and that which is proscribed, may pose some difficulty in the delineation of tasks which the Commissioner would describe as falling within or without the scope of a person's occupation. The present case furnishes an example. It is not clear where the Commissioner would place expenses incurred with respect to charges of inefficiency, incompetence or negligence under s 56 in the carrying out by an officer of ordinary day-to-day tasks.

    [32] It is not necessary to consider further the difficulties inherent in this aspect of the Commissioner's argument. The dichotomy may be relevant in other spheres of the law, but is not useful to determine the question arising under s 8-1(1)(a), as to what it is that is productive of a person's assessable income. It does little more than characterise conduct by reference to wrongdoing. In some cases a reference to conduct which is wrongful may be to that which is remote from a person's occupation. In others, such as the present case, it will be to that which is a breach of a duty imposed by the employment itself. A determination as to what is productive of assessable income in a particular case may need to take account of any number of positive and negative duties to be performed or observed by an employee or other salary-earner. It is that determination which provides the answer as to whether the occasion is provided for the expenditure in question.

    [33] That no narrow approach should be taken to the question of what is productive of a taxpayer's income is confirmed by cases which acknowledge that account should be taken of the whole of the operations of the business concerned in determining questions of deductibility. A similar approach should be taken to what is productive of a salary-earner's income, whether it be described as employment or by reference to a bundle of tasks to be performed and duties to be observed. In some cases those duties to be observed may extend beyond what is contained in a contract of employment. In Cooper, Hill J, referring to the statement in Ronpibon Tin, observed that it will often be necessary to analyse with some care the operations or activities regularly carried on by the taxpayer, and Lockhart J referred to the need to have regard to the terms and conditions of a taxpayer's employment. A reference to the "day-to-day" activities undertaken by a taxpayer may not be a sufficient description of what their position involves. So, in Commissioner of Taxation v Finn expenses of a senior design architect in the public service incurred in travelling in order to improve the taxpayer's knowledge were considered in the context of his employment by the government in accordance with his conditions of service, and as referable to his prospects of promotion. The essential difficulty with the Commissioner's argument in this case is that it does not fully recognise the scope of the respondent's role as an officer of the Public Service and what his office exposed him to…

    [37]…The respondent's outgoings, by way of legal expenses, followed upon the bringing of the charges with respect to his conduct, or misconduct, as an officer. He was exposed to those charges and consequential expenses, by reason of his office. The charges cannot be considered as remote from his office, in the way that private conduct giving rise to criminal or other sanctions may be.

    (Emphasis added, references omitted.)

1. The court concluded that Mr Day’s expenses were indeed deductible.

2. The court’s analysis of the relationship between costs arising from employment and deductibility under s 8-1 demonstrates that no bright line exists between what may or may not be deductible. Clearly, Mr McKenzie was not carrying on a business within the terms of s 8-1(1)(b), but the question remains, were his relocation expenses incurred in gaining or producing …assessable income within the ambit of s 8-1(1)(a)? Careful characterisation of the nature and context of those expenses is necessary to answer this question.

3. Taking into account the decisions cited in Day, I consider that the expenses must necessarily fall outside the scope of the paragraph. I have assumed for the purposes of this analysis (but without finding to that effect) that there is a direct, even a causal, connection between events occurring at Mr McKenzie’s place of employment and the making of the magistrate’s order. On that assumption, Mr McKenzie’s expenses do not fall into what the majority in Day referred to as expenses associated with private conduct giving rise to criminal or other sanctions (at [37]).

4. Even so, the expenses bear too remote a relationship to gaining or producing income to be deductible. The mere fact of a connection between the two is insufficient; as the court in Payne, at [13], noted, a causal connection between the expenditure and the derivation of income is not enough; something closer and more immediate is necessary. It is well established that not all expenses associated with carrying on business or serving in employment give rise to a tax deduction. Here, the costs are in no sense an input of employment; they are not a necessary outgoing stemming from the nature or actuality of his employment, but rather a cost associated only tangentially with that activity.

5. The cost of defending litigation of a personal character arising in the context of business or employment may be deductible, as Day demonstrates. But not all such litigation will be a deductible cost. For example, the cost of defending an assault charge arising out of an altercation that happened to occur on work premises would be unlikely to be deductible. The court in Day was divided on the question of whether defending charges brought by an employer would give rise to deductible expenses; it is reasonable to surmise that it would have been united – against deductibility – if the charges had been brought by someone other than the employer. What are significant in Mr McKenzie’s situation, I think, are the degrees of separation between employment and cost: thus, the employment led to mental breakdown, the breakdown led to a domestic violence charge, the charge led to the magistrate’s order, the order occasioned expenses for Mr McKenzie. While conceding that there is a causal link between the beginning and the end of that chain, it strains credibility to describe such expenses as having been incurred in gaining or producing assessable income.

6. The alternative characterisation of the relocation expenses is that they were incurred, in effect, by way of the involuntary transfer of an employee (Mr McKenzie) due to the downstream consequences of decisions or omissions made by the employer (the Department).

7. I do not think the factual circumstances of this case can support this characterisation of what happened to Mr McKenzie, but it is unnecessary to set out my reasons for this view since, even if I were to find he had been involuntarily transferred, the costs associated with this will not generally qualify as deductions under s 8-1.

8. The Tribunal was referred to Taxation Ruling TR 95/17, where the Australian Taxation Office provided the following ruling:

   178. When ADF members are transferred from one base to another, deductions are not allowable for expenses incurred as the result of the transfer (e.g., removal and storage expenses).

   179. Where an ADF member transfers from one locality to another, expenses incurred in moving to a new residence to take up duties of the new position, are not incurred in gaining or producing assessable income and are not an allowable deduction under subsection 51(1) of the Act. The ADF member is travelling to work and not between two places of employment.

   180. Relocation expenses incurred by ADF members to take up a transfer in existing employment are not allowable under subsection 51(1). This applies whether the transfer of employment is voluntary or at the employer's request.

   181. This principle would be equally applicable to compulsory transfers in lieu of disciplinary actions or to transfer as part of a member's employment conditions.

   Although this ruling was made specifically for members of the Australian Defence Force (of which Mr McKenzie was not one at the relevant time), the Commissioner described the principles underpinning it as applicable to taxpayers in general. The Tribunal is not, of course, bound by taxation office rulings, but is entitled to consider them as guides to the application of the principles in the Assessment Act: see Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634.

9. Decided cases are consistent with this ruling. In Fullerton v Commissioner of Taxation(1991) 32 FCR 486 the Federal Court ruled that the relocation expenses of a forestry worker transferred involuntarily from Bundaberg to Maryborough were not deductible. Similarly, in Case U91 87 ATC 525 a Commonwealth public servant was transferred at the request of his employer from a state office to its central office in Canberra. He was denied a deduction for expenses incurred in attempting to auction his house, on the basis that the expenses were too remote from the income-producing process to be incurred in gaining or producing assessable income. The Tribunal found (at [12]) that the costs of the auction were not incurred in gaining or producing assessable income and were of a private or domestic nature. These cases reflect the principle articulated in Day at [23], where the High Court majority referred to the distinction made by Hill J in Cooper:

   His Honour described the expenditure as referable to getting the work, rather than doing it.

10. Mr McKenzie’s position is that he had no choice in complying with the order and incurring the expense, whereas the applicants in Fullerton and U91 had the option of resigning from employment rather than incurring the expense. He said that his transfer was mandatory, as opposed to being merely involuntary. I do not think this distinction alters the principle for which the cases stand, however. What is relevant is that such expenses relate to the activity of getting to work, rather than the activity of working.

    CONCLUSION

11. Throughout the hearing Mr McKenzie pressed the Tribunal to accept evidence relating to malfeasance on the part of the Department. He maintained that the mishandling by the Department of events in the workplace injured him mentally and justified a decision by the Tribunal that his expenses were deductible. While I accepted that Mr McKenzie feels passionately that the Department’s handling of his case is at the centre of his claim before the Tribunal, the better view is that it is irrelevant to the question of tax deductibility. On that basis, no purpose is served in reciting at length any of the evidence Mr McKenzie attempted to present going to the question of the Department’s behaviour.

12. Section 14ZZK of the Administration Act places the onus on Mr McKenzie to establish that his relocation expenses are deductible. With respect, he has failed to meet that benchmark. For that reason, the reviewable decision of the Commissioner of 8 February 2018 is affirmed.

I certify that the preceding 33 (thirty-three) paragraphs are a true copy of the reasons for the decision herein of Deputy President Gary Humphries AO

.....................................................................

Associate

Dated: 31 January 2018

Date(s) of hearing:	26 November 2018
Date final submissions received:	14 December 2018
Applicant:	In person
Solicitors for the Respondent:	Kelly Minerds, Australian Taxation Office