PSJF and Commissioner of Taxation (Taxation)

The Administrative Appeals Tribunal considered a dispute between the Applicant, a photographer, and the Commissioner of Taxation concerning work-related expense deductions claimed for the 2013 and 2014 financial years. The Applicant had claimed significant amounts for travel expenses and other work-related expenses, which the Commissioner disallowed in full. Consequently, amended assessments and shortfall penalty notices were issued, which the Applicant objected to, and these objections were disallowed, leading to the matter being brought before the Tribunal for review.

The Tribunal was required to determine two primary issues: first, whether the Applicant was entitled to claim some or all of the disallowed travel and other work-related expenses as allowable deductions under section 8-1 of the *Income Tax Assessment Act 1997* (ITAA 1997); and second, whether the administrative penalties imposed by the Commissioner should be remitted, in whole or in part. The determination of the allowable deductions issue was further divided into disputed travel expenses and other disputed expenses.

The Tribunal applied the two-pronged test for allowable deductions, requiring that an expense must fall within the scope of section 8-1 of the ITAA 1997 and be substantiated with written or receipt-based evidence. The Applicant bore the onus of proof to establish these claims. The Tribunal found that the Applicant failed to provide sufficient evidence to substantiate his claims for both travel and other expenses. Conflicting accounts were given by the Applicant and his partner regarding the loss of receipts, with neither explanation providing a basis for the Tribunal to exercise discretion in favour of the Applicant. Furthermore, the Tribunal found no evidence to warrant the remission of the administrative penalties.

Ultimately, the Tribunal concluded that the Applicant had failed to discharge his onus of proof in establishing an entitlement to any of the disputed expenses as allowable deductions. Accordingly, the Tribunal affirmed the Commissioner's decisions under review, including the disallowance of the claimed deductions and the imposition of the 25% shortfall penalty.