Tran and Commissioner of Taxation (Taxation) - [2025] ARTA 1036

Tran and Commissioner of Taxation (Taxation) [2025] ARTA 1036 (17 July 2025)
Applicant:Ti Ke (Eddie) Tran
Respondent: Commissioner of Taxation
Tribunal Number: 2021/0218, 2021/0219, 2021/0220, 2021/0221
Decision:The Tribunal affirms the decision under review.
Tribunal:Senior Member Lye
Place:Brisbane
Date:17 July 2025

..........................[Sgnd].............................
Senior Member J Lye

Catchwords
TAXATION – gambling – poker – record-keeping – whether the Applicant was running a business – administrative penalty – alleged loans
Legislation
Taxation Administration Act 1953 (Cth) – s 8; s 14ZYA; s 14ZZE; s 14ZZJ; s 14ZZK; s 14ZZL; Schedule 1 – s 284-75; s 284-90; s 298-20
Cases
Allied Pastoral Holdings v Federal Commissioner of Taxation [1983] 1 NSWLR 1
Babka v Federal Commissioner of Taxation (1989) 89 ALR 373
Bosanac v Commissioner of Taxation (2019] 267 FCR 169
Bosanac v Commissioner of Taxation [2018] FCA 946
Brajkovich v Federal Commissioner of Taxation (1989) 89 ALR 408
Commissioner of Taxation v Cassaniti (2018) 266 FCR 385; 109 ATR 119
Commissioner of Taxation v Ross [2021] 174 ALD 77
Day v Perisher Blue Pty Ltd (2005) 62 NSWLR 731
Evans v Commissioner for Taxation (1989) 89 ATC 4540
Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614
Gashi v Commissioner of Taxation (2013) 209 FCR 301
George v Federal Commissioner of Taxation (1952) 86 CLR 183
Krew v Federal Commissioner of Taxation (1971) (1971) 45 ALJR 249
Commissioner of Taxation v Liang (2025] 307 FCR 1
Ma v Federal Commissioner of Taxation (1992) 37 FCR 225
QQRK v Commissioner of Taxation [2023] AATA 3493
Rawson Finances Pty Ltd v Federal Commissioner of Taxation (2013) 93 ATR 775
Re Day (2017) 91 ALRJ 262 (2017) 340 ALR 368
Russell v Federal Commissioner of Taxation (2009) 74 ATR 466
Sanctuary Lakes Pty Ltd v Commissioner of Taxation (2013) 212 FCR 483
Trautwein v Federal Commissioner of Taxation (1936) 56 CLR 63
Vu v Commissioner of Taxation 2006 ATC 4387
Youssef v Commissioner of Taxation (Appeal) [2024] FCA 1154
Yung v Commissioner of Taxation [2012] AATA 872
Secondary Materials
IT 2655 - Income tax : betting and gambling - whether taxpayer carrying on business of betting or gambling
Legal Services Directions 2017 (Cth) – Appendix B
Statement of Reasons
Introduction

The writer, Ian Fleming, once famously described poker as ‘a cold-hearted, deadly game that breaks and bankrupts [men]’ and poker players as ‘cold-hearted butchers’.[1] Unlike other games of chance, poker is a game of skill and nerves, as well as luck playing its part.
[1] The Education of a Poker Player, Herbert Osborn Yardley with Introduction written by Ian Fleming, 1957 and republished in 2002 by High Stakes.
The Applicant in this proceeding, Mr Tran (Lucky Eddie, or Eddie the Blessed, as he is known in poker playing circles), is a highly skilled amateur poker player who claims to have lived for a number of years solely off his winnings from high stakes cash poker games played predominantly at Crown Casino in Melbourne and Star Casino in Sydney.
Mr Tran came to the attention of the Commissioner of Taxation (the Commissioner) who commenced an audit into his affairs in 2017. The Commissioner noted that despite large sums of money flowing through Mr Tran’s bank accounts, he had not lodged income tax returns for the 2014, 2015 and 2016 financial years.
The Commissioner audited Mr Tran and assessed him for unpaid income tax for the years 2014-2017, mostly arising from ‘unexplained deposits’ to his bank account. He was also assessed for administrative penalties.
Mr Tran disputes the Respondent’s assessments. He contends the deposits into his accounts are explicable by his significant poker winnings as well as repayments of loans he says he gave to a large number of people (including fellow gamblers, family and friends). He says it is normal for poker players to move large sums of money around. He says he assumed that his poker winnings resulted from his ‘hobby’ and were not assessable and so had kept no records. He objected to the Commissioner’s amended assessments and then applied to the Tribunal seeking review of the Commissioner’s decision.
Mr Tran has run these proceedings and the final hearing largely without legal representation. This was an onerous task given the number of witnesses he called to give evidence.
Unfortunately, for the reasons which follow, Mr Tran has not succeeded in persuading the Tribunal to set aside the Commissioner’s decision. On the available evidence, the Tribunal cannot be satisfied that the Commissioner’s assessment is excessive, and that Mr Tran has explained what his taxable income should have been for the years in dispute.
PRELIMINARY MATTERS
Tribunal’s authority to hear the applications
Mr Tran lodged his application with the Administrative Appeals Tribunal on 15 January 2021.[2] On 14 October 2024, the Administrative Appeals Tribunal (AAT) became the Administrative Review Tribunal (the Tribunal). Under the transitional provisions in the Administrative Review Tribunal (Consequential and Transitional Provisions No. 1) Act 2024 (Cth) (the Transitional Act), proceedings in the AAT that were not finalised before 14 October 2024 are to be continued and finalised by the Tribunal. Anything done in relation to the joint proceedings before 14 October 2024 is taken to have been done by the Tribunal.
[2] Exhibit 1 Hearing Book (Hearing Book) Tab 43.
The decisions which are the subject of review
The relevant decision is the Respondent’s objection decision dated 30 November 2018.[3]
[3] Hearing Book Tab 44.
The tax issues
The following issues arise for determination in this proceeding:
The primary tax issues
1.Has Mr Tran successfully discharged his onus by demonstrating that the assessments issued to him by the Commissioner are excessive?
2.Has Mr Tran established his correct taxable income for each of the relevant years?
The penalty issues
1.Assuming the Tribunal finds a tax shortfall exists, was the penalty imposed at the correct rates?
2.Should it be remitted or reduced?
The shortfall interest issue
1.Is the application for review of shortfall interest valid?
The witnesses
During the audit process, Mr Tran provided testimonial statements from 42 people to the Commissioner. The majority of these concerned unexplained deposits into Mr Tran’s accounts which Mr Tran said were repayments of loans. Although these did not represent the parties to all the unexplained transactions,[4] Mr Tran contended they showed a pattern of transactions. At the final hearing, the Tribunal heard oral evidence from 26 witnesses, including Mr Tran.
[4] In Appendix A to his closing submissions, the Commissioner identified 50 parties who had deposited money into Mr Tran’s accounts who had not been called to give evidence.
Given the large number of witnesses, a summary table of the fellow players and casino staff such as dealers/croupiers[5] who gave evidence is at Annexure A to these reasons. The evidence of significant witnesses among Mr Tran’s family and close friends about other transactions is evaluated in the body of these reasons.[6]
[5] The croupier is a casino employee, in charge of a gaming table at a casino. The dealer (also a casino employee) distributes tiles to players at the poker table and manages the plot and players bets.
[6] Some additional witnesses are at Annexure A.
Mr Tran did not call evidence from all the people/entities who deposited money into his accounts. I have identified some of the remaining ‘unexplained’ deposits in these reasons.
Mr Tran’s bank accounts
During the years in dispute, Mr Tran operated:
(a)jointly with his mother, two Westpac loan accounts (Westpac 4620 and Westpac 4252);[7]
(b)Westpac credit cards;[8]
(c)a cage account at Crown Casino (Crown); and
(d)a cage account at Star Casino (Star).
[7] Hearing Book Tab 4 [17].
[8] Hearing Book Tab 6 [11].
A player’s casino cage accounts operate as a form of bank account. Players can deposit money and casino chips into these accounts. They can also transfer money into and out of their accounts. Mr Tran’s cage accounts will be discussed in more detail below.
A chronology of key events[9]
[9] All references in this section, unless otherwise indicated are to Mr Tran’s first affidavit, 7 June 2024, Hearing Book Tab 4.
Mr Tran is a Cambodian refugee who came to Australia with his family in around 1986. Mr Tran is university educated but his real talents are languages,[10] mathematics and the ability to ‘read’ other people. These are essential for the game of poker – a highly skilled game to which Mr Tran was first introduced when he worked at Crown for a few years after attending university as a table games dealer.
[10] Mr Tran told the Tribunal he spoke around 6 languages.
Mr Tran told the Tribunal that he was inspired to play poker from watching fellow Australian, Joe Hachem[11] win the World Series of Poker in 2005. He told the Tribunal he started playing with friends and soon discovered a natural aptitude for the game. Before long, he was playing 2-3 times per week.
[11] Mr Hachem gave evidence in these proceedings. He is a tournament playing professional poker player.
At the time Mr Tran started to play poker, he and his wife ran a café in Melbourne (Lonsdale Coffee Delight).
By 2007, Mr Tran’s skills had sufficiently improved that he was playing poker at Crown and had his own cage account.[12]
[12] The Casino Cage is the place where money and chips are exchanged. Players can open deposit accounts at the casinos so as to have ready access to funds for playing games.
In 2008, Mr Tran and his best friend, Peter Ling thought they were sufficiently skilled to enter “The Aussie Millions Main Event” Poker Tournament[13] at Crown. Mr Tran told the Tribunal:
This event is the largest prize poker tournament in Australia. I paid an entry fee of AUD$10,600. I entered this tournament with my best friend, Peter Ling, who won AUD$500,000 by finishing in 4th place in the 2008 Aussie Millions Tournament. I had contributed 18% of Ling’s entry fee which entitled me to 18% of Ling’s winnings, namely $90,000. This became my initial bank roll to participate in stake poker games held at Crown Casino in Melbourne.
[13] A poker tournament which was effectively a series of tournaments played at Crown. It is no longer held.
From this point on, Mr Tran began to play poker at Crown most days of the week.
By 2009, Mr Tran estimated his net winnings for the year at around $190,000. There were no records before the Tribunal to support this estimate. He told the Tribunal he was still playing smaller games at this time.[14]
[14] Transcript page 261.
By 2011, Mr Tran told the Tribunal he guessed he was winning $100,000 to $200,000. This included poker, sports betting (see below) and horse racing.[15] Under cross-examination, Mr Tran conceded he could not tell the Tribunal how much he won overall from gambling that year but thought it would have increased from previous years.[16]
[15] Transcript page 261.
[16] Transcript page 261.
2012 calendar year – Mr Tran starts playing poker full time
In 2012, the couple sold the café. Mr Tran had described the café as ‘very successful’.[17] Contemporaneous records suggested it returned a relatively modest partnership income for the 2012 and 2013 income years[18] and a capital gain on sale of $52,762 in the 2013 income year.[19] Under cross-examination, Mr Tran told the Tribunal he could not be sure how much money the café was making.[20] He was evasive under cross-examination about whether it was the couple’s only income at the time.[21]
[17] Hearing Book Tab 4 [4].
[18] Exhibits R3 and R4.
[19] Transcript pages 101 and p 118 and Exhibit R5.
[20] Transcript page 101
[21] Transcript pages 101-102.
Mr Tran said his intention from this point was to play poker full time. He told the Tribunal in his statement that the proceeds from the sale plus accumulated winnings gave him a bankroll of $650,000 which allowed him to play at Crown, Star and in Macau.[22] However, under cross examination he told the Tribunal he thought his bankroll in 2012 would have been close to $1 million.[23]
[22] Hearing Book Tab 4 [8].
[23] Transcript page 261.
While I am prepared to accept that Mr Tran likely had winnings to contribute to his bankroll in 2012, in the absence of corroborating records, I question whether he had the additional $500,000 he said he contributed from his poker winnings. As will be seen from these reasons, Mr Tran was quick to offer the Tribunal estimates, which suggested he was a remarkably successful player, but did not have the records to substantiate them. They were rough guesses from his memory, and he was also prone to amending them. As such I found them unreliable. For example:[24]
Like, you know, like, it’s not like they’re all in one area. I’ve got cash and chips and I got some at Star City, I got some at Crown, I’ve got some at home. So it’s whatever, at the time, whatever bank roll I have. So, it says approximately 650, and I say close to one million if not more, that’s, for me, it’s close enough.
[emphasis added]
2013 calendar year – Mr Tran plays high stakes cash games
[24] Transcript page 263.
Mr Tran described 2013 as his ‘breakout year’.[25] From 2013, Mr Tran’s stated preference was to play in high-stakes private cash games, playing ‘Pot Limit Omaha’.[26] He played games with buy-ins[27] which started at $10,000 up to uncapped games. He told the Tribunal:
The “World Series” Poker event came to Crown Casino in 2013 for the first time. I had entered this tournament with a buy-in of $10,000. I came 16th in this event and won $33,016 in prize money. As a result, I concluded that tournaments occupied too much time and that the risk/reward was poor. I gravitated to private cash games at the Crown and Star casinos as they attracted lots of wealthy businessmen and the games themselves were easier, more enjoyable and presented a potential to win a lot of money over a short period of time.
[25] Hearing Book Tab 2 [6].
[26] Mr Tran described Pot Limit Omaha as a poker game in the same style as Texas Hold'em where every player receives four private cards (as distinct from Texas Hold’em where every player receives an initial two private cards), and must make the best hand possible using two (and only two) of their private cards and three (and only three) of the five community cards which are available to every player. In Pot Limit Omaha you cannot bet/raise more than the initial pot which consists of the moneys contributed by the participants. Hearing Book Tab 2 [6].
[27] The buy-in is an amount players pay to participate in a poker game.
By 2013-2014, Mr Tran claimed to have a bankroll for his gambling activities of ‘approximately $2 million to $2.5 million’.[28] Once again, this figure was a bare estimate, unsupported by records.
[28] Applicant SFIC [8].
2015 – a $1.4m property was purchased
In mid-2015, Mr Tran told the Tribunal that he gave his wife $1.4 million to buy property.[29] That property was in Glen Waverley, Victoria and it was purchased outright on 15 August 2015.
[29] Transcript page 105.
In the same year, Mr Tran claimed to have a bankroll of $3 milion to $4 million, increasing to $4 million to $5 million in 2016. Once again, this was an estimate, unsupported by records. He also estimated his winnings for 2016 to be $1.5 million. Under cross examination, and confronted with maths which suggested he could not have both increased his bankroll as suggested and paid for the property, Mr Tran changed his estimate, adding to its unreliability:[30]
I mean, I don’t know what you’re talking about, but 2015, what date did I – did I give my wife? I mean – I mean, I gave – I gave her 1.4, and this is all approximate. Four to 5 million, so at that time, it could have been 4 million, right. And I gave her 1.4 so I left with 2.6 and 1.5 – that becomes 4.1 already. So it’s still – it’s still – fit in that $4 – $5 million range. So it’s such a big range. So it’s – see. What I said is also correct, even though it’s only an approximate guess.
[emphasis added]
[30] Transcript page 264.
2016 – a $738,000 property is purchased, and the Company and the Family Trust are established
In 2016, Mr Tran spent $738,000 on another property.[31] That property was in Mulgrave, Victoria and it was purchased outright in May. Mr Tran initially told the Commissioner that he had funded the purchase[32] but then under cross-examination, said his wife might have paid for some of it.[33] He then changed his evidence again under oath to say he might have given some money to his wife to pay for it.[34]
[31] Hearing Book Tab 49 page 258; Transcript page 265.
[32] Hearing Book Tab 49 page 263.
[33] Transcript page 266.
[34] Ibid.
On 22 August 2016 Caitlin and Jakob Pty Ltd (the Company) was incorporated. Mr Tran was a director of the Company until 25 June 2018. He was also originally a shareholder but subsequently transferred his shares to his wife.
The company has at all times been trustee for the Ti Ke Tran Family Trust (the Family Trust).
2017 – the Commissioner’s audit commences
Mr Tran told the Tribunal that by 2017 his bankroll reached over $5 million. This was another estimate, unsupported by records.[35]
[35] Hearing Book Tab 2 [8].
On 24 May 2017, 2 deposits were made to Mr Tran’s Westpac account totalling $316,000 with the narration ‘deposit online payment Caitlin and Jaco’. Mr Tran told the Tribunal they were from the Company but denied they were income distributions to him. Instead, he told the Tribunal, and I quote, ‘I infer that they were gifts or distributions of capital’.[36]
[36] Hearing Book Tab 6 [38]- [39].
Mr Tran lodged an income tax return for the 2017 income year, disclosing assessable income of $25,495. By this time, the Commissioner had commenced his audit into Mr Tran’s affairs.
The present
Mr Tran told the Tribunal he ceased playing poker in the casinos in around 2018. He said he was banned from Crown and Star in roughly 2018 or 2019 but was not told why. [37]
[37] Transcript page 129.
At audit he told the Commissioner he was involved in property investment and development.[38] However he had not listed any occupation on his personal living expenses questionnaire.[39]
[38] Transcript page 91; Hearing Book Tab 61, page 1254.
[39] Hearing Book Tab 49.
The nature and extent of Mr Tran’s gambling and the poker games in which he was involved
It is necessary to describe the sort of poker games in which Mr Tran was participating during the years in dispute. These were high stakes games and the buy-ins, amounts being gambled, and the winnings were eye-watering in their size[40]. Mr Tran described the size of the loans he claimed were being transacted at the tables:[41]
You know, so it’s - I tell my friends, and they say, ‘You’re an idiot,’ because they don’t understand that we lend 20,000, 50,000, like we would lend, you know, $10 or $20, because some people - they’re like, ‘If I lent someone 5,000, I’d better write a contract.’ But on a poker - on the poker table, we haven’t got time for that. And there’s a lot of trust. There’s a lot of gentlemen’s agreement.
[40] The reader should assume that references to figures such as 10/20/25/50 etc in these reasons are references to hundreds of thousands of dollars.
[41] Transcript page 84.
By this stage, there could be no dispute that Mr Tran had a reputation in poker playing circles in and around both Crown and Star. Colleagues and former casino staff told the Tribunal, and I accept, that he was known to be a successful, engaging and entertaining poker player. [42]
[42] See for example the summary of evidence from Mr Hachem, Mr Seri, Mr Ng and Star and Crown employees at Appendix A.
A Star employee further described the games in which Mr Tran participated. He told the Tribunal:[43]
I have been a poker dealer since 2012 at The Star Casino, which is where I first met Eddie shortly after starting. Eddie is a regular at our casino, visiting multiple times a year for extended stays of a few weeks to a month. While visiting he plays in our high stakes poker cash games, where the blinds[44] range anywhere from $25/50 to $200/400 with buy-ins[45] in the hundreds of thousands.
While playing these games, Eddie is involved in many hands over very long sessions, some longer than my shift covers. He is very active in many pots, ranging from $10,000 in total to well over $200,000. One hand in particular that I can recall is a hand where Eddie made the nut flush, beating two others players for a pot[46] worth just over $400,000. To this day, it remains the largest pot I have ever awarded to a player at my table. Whilst he doesn't win every time I've dealt to him, he is definitely one of the most consistent and successful poker players I've seen over my many years of dealing.
[43] Hearing Book Tab 13 [2]-[3].
[44] Mandatory bets/contributions to the pot made before cards are dealt (to get the game started).
[45] The buy in is an upfront payment required to play in a poker game. The size of the buying can determine the total winnings from the game.
[46] The pot is the sum of money the players have backed during a single hand or poker game.
The whales

Mr Tran and his colleagues told the Tribunal that they were always keen to inject fresh money from overseas visitors into the funds circulating at the private cash tables. Mr Tran explained:[47]
Some of the participants in these cash games at the gaming tables provided at the casinos were extremely wealthy businessmen, principally of an Asian background. They had a passion for gambling and access to large amounts of money. Tran says that they enjoyed their high stakes games and that losses sustained by these people appeared to be of little consequence to them. They were known as “whales”.
[47] Hearing Book Tab 2 [7].
Another player, Andy Hun Wei Lee concurred:[48]
Eddie and I both had good reputations in poker circles and attracted the attention of wealthy businessmen, mainly from overseas, known as whales, who wanted to play in our games. Eddie made sure that they were always welcome.
[48] Hearing Book Tab 8 [3].
His colleague Bill Seri also told the Tribunal:[49]
Eddie, over time from my own observations, developed into an exceptional poker player. On many occasions a whale (a very wealthy businessmen) would request to be a participant in the game and, as Eddie commented, they were always welcome.
[49] Hearing Book Tab 11 [3].
The benefits offered to Mr Tran by the casinos
Mr Tran told the Tribunal he was rewarded by the casinos for the business he brought to them:[50]
But they (the casinos) gave me a lot of perks, like dinner vouchers and hotels. So, I would be playing poker almost every day because I enjoyed it, and I was winning. I still pinch myself today. Like, how did I become so good and so lucky. The managers would normally withdraw money from my account on my behalf most times, so they know me extremely well as I am one of the biggest winners, if not the biggest, for the last 10 years.
[50] Hearing Book pages 62-63.
It transpired that Mr Tran also received ‘commissions’ from online betting agencies from his activities. These amounts were no longer in dispute by the time of the Tribunal proceedings.
Mr Tran’s assumption that his gambling winnings were tax free
Mr Tran implied in his statement that he obtained advice from an accountant in 2012-2013 which guided his decision to focus on poker:[51]
I recall in late 2012 or early 2013 (after I had sold my business) that I spoke to my accountant Ken Ko from Ko & Associates about my winnings from poker. I recall saying words to the effect that I was “doing really well” on my poker playing and sports betting, do I need to pay any tax on that.
I recall that he advised me words to the effect that winnings from my poker playing or sports betting were not assessable and any losses were not deductible”
If I had believed that my gambling winnings were assessable and losses deductible I would have prepared and retained records to return these amounts in my income tax returns for the relevant period. I would also have retained records of my other costs incurred which relating to gambling but were not gambling losses. This would have included travel and hotel expenses.
[51] Hearing Book Tab 4 [36]-[38].
However, under cross examination, Mr Tran admitted that he only spoke to his accountant for the first time in 2017 about whether his gambling winnings were taxable, and this occurred after the Australian Taxation Office contacted him to advise he was being audited.[52]
[52] Hearing Book Tab 48.
Mr Tran also told the Tribunal that relying on his accountant’s advice, he did not lodge income tax returns for three years (2014-2016). Given his concession, I infer that he took this advice in 2017, that is, after the audit commenced.
AUDIT AND OBJECTION PROCESS
Audit
In July 2017, the Respondent commenced his audit into Mr Tran’s income tax affairs. The audit originally concerned the financial years ending 2014 to 2016 but was later extended to include the 2017 income year[53] (collectively, the years in dispute).
[53] Hearing Book Tab 101 pages 2162 – 2163.
At audit, Mr Tran initially told the Commissioner that in each of the years in dispute he had earned approximately $2 million per year from gambling.[54] Mr Tran later told the Commissioner that he had won approximately $1.5 million per year for the last 5 years. These amounts were estimates by Mr Tran.
[54] Hearing Book Tab 48 pages 255 – 257.
Mr Tran had no records of his gambling winnings and other gambling activities. He told the Commissioner that he had purchased 2 properties worth $1.4 million and $738,000 respectively.[55]
[55] Hearing book Tab 49 page 263. The first property was in the name of Mr Tran's wife while the second was in the name of the company as trustee for the family trust.
Having examined Mr Tran’s bank accounts and casino records which reported on his cage account and table games activities, the Commissioner employed a methodology of assessing unexplained deposits were treated as income of Mr Tran. He determined:
(a)that Mr Tran received the following deposits into his bank accounts for each year in dispute;[56]
[56] Hearing Book Tab 61 pages 1261 – 1277.
-    for the 2014 income year, $558,340;
-    for the 2015 income year, $1,220,123; and
-    for the 2016 income year $1,594,975;
(b)that Mr Tran had obtained funds from the following sources: [57]
-    his cage accounts with Star and Crown;
-    tuition and training fees;
-    from third parties;
-    unexplained deposits;
(c)Mr Tran had deposited and withdrawn $26.6 million from accounts at the Star;[58]
(d)Mr Tran had deposited and withdrawn $32.1 million from accounts at Crown.[59]
[57] Hearing Book Tab 61, page 1256.
[58] Hearing Book Tab 75, page 1432.
[59] Hearing Book Tab 75, page 1434.
following the issue of an audit position paper,[60] the Commission determined:
(a)Mr Tran had taxable income for the income years 2014 to 2016, requiring him to lodge an income tax return for each year;[61] and
(b)Mr Tran had taxable income of $5,255,403 for the 2017 income year.[62]
[60] Hearing Book Tab 61, pages 1251 – 1302.
[61] Hearing Book Tab 61, pages 1257 and 1259.
[62] Hearing Book Tab 61, page 1257.
The Commissioner requested that Mr Tran lodge his income tax returns for the income years 2014 to 2016 but, as I have noted, he did not do so. Mr Tran had only declared taxable income of $25,495 (interest earned) for the 2017 income year.[63]
[63] Hearing Book Tab 65, pages 1313 – 1323.
On 5 September 2018, the Commissioner issued final reasons for his audit position that there was a tax shortfall for each year in dispute.[64] He also applied an administrative penalty of 75% for the 2014 to 2016 income years for Mr Tran’s failure to lodge tax returns.[65] That penalty was uplifted by 20% for the 2015 and 2016 income years.[66] The basis for the penalty applied was Mr Tran’s failure to lodge income tax returns for each income year.
[64] Hearing Book Tab 75, pages 1408 – 1439.
[65] Schedule 1, TAA, s 284 – 75 (3).
[66] Schedule 1, TAA, s 284 –220.
The Commissioner separately applied penalty for the 2017 year in the amount of 75% due to intentional disregard of a taxation law (the shortfall penalty)[67].
[67] Schedule 1 TAA, s 284 – 75 (1).
On 13 September 2018, the Commissioner issued the following:
(a)assessments for the income years 2014 to 2016;[68]
(b)an amended assessment for the 2017 income year;[69]
(c)assessment for the default penalties;[70] and
(d)assessment for the shortfall penalty.[71]
[68] Hearing Book Tabs 76 – 78. ITAA 36, s 167.
[69] Hearing Book Tab 79. ITAA 36, s 167.
[70] Hearing Book Tabs 75 and 90-92.
[71] Hearing Book Tab 93.
OBJECTION
On 30 October 2018, Mr Tran lodged objections against the primary tax assessments and the penalty assessments for the years in dispute.[72]
[72] Hearing Book Tabs 94 – 100.
The Commissioner issued an amended assessment for the 2017 income year on 16 January 2019.[73]
[73] Hearing Book 81. A correction for the Medicare levy surcharge.
On 30 November 2018, the Commissioner issued his objection decision.[74] He partly allowed the objection for the income years 2014, 2016 and 2017. The position he relevantly determined for Mr Tran at objection has been summarised as follows:
[74] Hearing Book Tab 44.

INCOME	2014	2015	2016	2017
Net Funds received from The STAR (‘Category A income’)	$ 258,235	$ 501,750	$ 1,806,810	$ 2,650,687
Net Funds received from Crown Limited (‘Category B income’)	$ 566,070	$ 298,500	$ 82,950	$ 482,505
Training fees received from overseas (‘Category C1 income’)	-	-	$ 130,770	$ 143,670
Commission received (‘Category C2 income’)	-	-	-	-
Net funds from other persons (‘Category D income’)	$ 439,960	$ 313,639	$ 201,976	-$ 91,380
Other funds transferred in (‘Category E income’)	$ 227,899	$ 413,747	$ 657,100	$ 169,534
Interest income (not omitted)	$ 26,720
Taxable Income	$ 1,492,164	$ 1,527,636	$2,879,606	$3,355,016

On 7 December 2020, the Commissioner issued to Mr Tran amended assessments for the 2014, 2016 and 2017 years.[75]
[75] Hearing Book tabs 85 – 87.
The methodology used by the Commissioner to assess Mr Tran
The Commissioner had relevantly identified different categories of payments from which Mr Tran appeared to have supported himself and his family for the years in dispute:
(a)Casino winnings (predominantly from Star and Crown);
(b)Tuition/training fees;
(c)Other deposits into Mr Tran’s bank accounts; and
(d)Cash transactions which could not be quantified as no records were available.[76]
[76] Hearing Book Tab 61, page 1256.
The Respondent’s reliance on the reports from Star and Crown Casinos
In the course of his investigations, the Commissioner had sought and obtained various reports from Crown.[77] Similar, but not identical reports were obtained from Star.[78]
[77] Hearing Book Tab 53.
[78] Hearing Book T 59.
The Commissioner had identified that Mr Tran made numerous large cash deposits and withdrawals from his cage accounts at each casino in the years in dispute. This was subsequently addressed in cross-examination with Mr Tran at the hearing.[79] The Commissioner also relied on the reports from Crown and Star to show remarkably high turnover of monies reported for Mr Tran in his cage accounts. This was also subsequently addressed with Mr Tran in cross examination at the hearing.[80]
[79] See for example Transcript pages 135-136.
[80] Transcript page 133. Turnover is defined by Crown as ‘the cumulative total of all bets made based on a pre-set formula for that game, in a particular period of play and does not reflect the player’s win Hearing Book Tab 53 page 411.
Mr Tran had himself obtained some records from Star and said they showed that amounts deposited into his cage account came from his winnings from playing poker.
The Commissioner disagreed. He used the reports he obtained from Star to analyse the manner in which deposits or withdrawals were made by Mr Tran (eg by cash, by chips or by electronic transfer from another bank account).[81] From this, he calculated Mr Tran’s ‘winnings’ as equivalent to but not exceeding chip deposits to his cage accounts.[82]
[81] Hearing Book Tab 44 [16].
[82] A similar exercise was undertaken for Crown, Hearing Book Tab 44 [28]-[41]. It should be noted that Crown used different reports to Star but ultimately the process was similar.
In performing these calculations, the Commissioner formed the view that there were large deposits to Mr Tran’s cage accounts for both casinos which were unexplained, and he suggested they came from activities other than gambling. As such he could not be certain they were not taxable income in Mr Tran’s hands.
The Commissioner also relied on the reports to conclude that:[83]
(a)Mr Tran’s gambling winnings at both casinos across the years in dispute were significantly smaller than he had contended in his estimates;
(b)Large amounts of cash deposited or used to buy chips appeared to have no identifiable source ($4.7M (Star) and $849,000 (Crown)); and
(c)Analysis of Mr Tran’s bank accounts suggested these ‘unexplained’ funds could not have come from Mr Tran’s winnings at poker or his bank accounts.
[83] Hearing Book Tab 44, pages 242-243.
Mr Tran’s reliance on his spreadsheets
Mr Tran disputed the Commissioner’s analysis from the Casino reports[84] and contended that the large chip/chip voucher purchases he made were explicable by the fact that he:
(1) wanted to have a large amount of chips at the table to loan; and
(2) frequently loaned chips to players[85] or exchanged chips for cash at the table and these loans were repaid in a number of ways (cash, chips and bank transfers) either in the same session or over different periods of time.
[84] Hearing Book Tab 4 [48].
[85] Transcript page 48.
Mr Tran contended that the Commissioner was in error in treating chips as a proxy for his winnings given the poker table loans. However, he had no records to corroborate these loans of chips or cash at the tables or any cash or chip repayments and he also would not have been able to attest to the source/s of the cash he was receiving in exchange for chips. The onus was on him to prove the Commissioner’s assessment was excessive.
In evidence before the Tribunal, were a number of spreadsheets which Mr Tran had prepared with his former lawyer and accountant to explain the unexplained deposits for the years in dispute.[86] Mr Tran described his spreadsheets as a ‘roadmap for all the monies’ which flowed into his Star, Crown and Westpac accounts during the years in dispute including the loans he made to other players at the poker tables which had been repaid. [87] In his opening submissions, he contended that the spreadsheets ‘proved’ everything except for $400,000 across the years in dispute.[88]
[86] Hearing Book Tabs 82 and 83. These comprised a cash voucher reconciliation sheet, a bank cash withdrawal list and spreadsheets explaining transactions on Mr Tran’s bank accounts and his cage accounts.
[87] Hearing Book Tab 4 [15].
[88] Transcript page 73.
For the reasons which follow, I am not persuaded on the evidence that Mr Tran has explained ‘everything’ via these spreadsheets and his witness evidence.
Evaluation of Mr Tran as a witness
Mr Tran‘s particular priority in giving his own evidence, was to ensure the Tribunal understood and acknowledged the extent of his skill and success. I accept that the evidence shows that during the years in dispute, Mr Tran had the reputation of being very skilful, successful and entertaining as a poker player.
Unfortunately, the evidence also showed that Mr Tran either deliberately or out of ignorance and neglect had failed to put in place any system of record keeping to monitor his gambling and/or spending. By his own admission, Mr Tran took no care to track how much he bet, won and lost at poker across the years in dispute and apart from text messages (which no longer existed). He also had no systems or records for managing the significant loans/gifts he claimed to have made to family, friends, fellow players and even to people he did not know. He argued it was not necessary for him to keep records:[89]
Counsel: If you’re doing it, as you say, your sole source of income after 2012 and you’re not doing anything else, and you say you’re making significant gambling winnings from it, wouldn’t a reasonable person keep records of those activities so you know how much you’re winning, how much you’re losing, how much you’re paying out to other people? Wouldn’t that be what a reasonable person would do?
Mr Tran: No, I do not keep a record because I don’t run a business. I just gamble so I actually don’t know how much I won from sports betting or lost – I probably lost, and table games I lost as well, but I mean, I gamble a lot, so why would I keep a record? And if I keep a record, I would have – I would have had all those spendings, and hotel bills, and flights, and dinners and all that. But even if I win money from Poker or sports betting, it is confirmed by the ATO already that is not a taxable income anyway, so where’s your question going to lead here?
[89] Transcript page 100; Transcript page 261.
The lack of records, combined with both Mr Tran’s tendency to exaggerate and his preference to deal in cash, made it difficult for him to demonstrate to the Tribunal what he won, lost, loaned and spent or the size of his cash bankroll.
Looking at the matter chronologically (as I have done above), I am not satisfied the evidence Mr Tran has given about the size of his cash bankroll was correct or reliable. Aside from the lack of any records, the numbers he quoted did not add up. The Commissioner submitted and I accept that even on Mr Tran’s own best estimates of his yearly winnings he was unlikely to have been able to make all the loans and gifts he identified in evidence from his winnings plus increase his bankroll as described.
The taking of Mr Tran’s evidence itself was time-consuming and stretched across 3 days of hearing time. There were significant interruptions during his evidence, and these were largely caused by Mr Tran.[90] He was a difficult witness. Under cross examination, he frequently objected to or tried to deflect or avoid answering any question he did not like. He would also often answer a question with a question. In some cases, he would argue that he should not be required to answer. He sometimes became angry when asked about any subject he did not want to talk about (such as the Company and the Family Trust) and was evasive in his answers.[91] He occasionally tried to wind back previous answers when he realised they might have been to his detriment.[92] I also observed him repeatedly attempt throughout the hearing, to distract the Tribunal using complaints, objections (without reasons) and other diversionary tactics.
[90] The Commissioner cited specific examples of these interruptions in his closing submissions at [131].
[91] Transcript pages 95-98.
[92] See for example, Transcript page 144.
Mr Tran deployed these same tactics while his own witnesses were being cross-examined. Repeatedly he had to be told not to congratulate witnesses on ‘correct answers’. He also repeatedly interjected under the guise of making objections when a witness was providing answers to questions he did not like. Mr Tran defended his actions, saying he was ‘trying to help the witnesses to give accurate evidence’.[93] I do not accept this conduct is appropriate, and Mr Tran was repeatedly warned so during the hearing.
[93] Applicant closing submissions, section 8.
I am conscious that Mr Tran is a self-represented litigant. However, he is natively intelligent and is a demonstrably skilled tactician. My strong impression from watching Mr Tran over the course of the hearing was that he was a quick study and was well aware of the impact his numerous interruptions and interjections were having on cross-examination. The intrusions were calculated to disrupt or to send signals to his witnesses.
I also observed that Mr Tran skilfully, and repeatedly avoided giving a clear evidence about whether he was gambling full time during the years in dispute. In his statement Mr Tran said, ‘I did not have any sources of employment for income during the Review Period.’[94] This contradicted his previous advice to the Australian Taxation Office that he was a property developer. Then, under cross-examination the following exchange took place:[95]
Counsel: That was your sole occupation, wasn’t it? Playing poker after 2012?---
Mr Tran: It was not my occupation. I just play more, and I just kept winning, I just kept playing. When I sold the business, my intention was to buy another business, but I was – I was winning so I kept playing.
Counsel: From 2012, you weren’t working in any other capacity, you say, just playing poker?
Mr Tran: I played poker before 2012, and I played poker after 2012. I also gambling on sports betting, I also play table games. I mean - - -
Counsel: But you’re effectively doing it full-time, you say?
Mr Tran: No, I mean, I got a lot of free time. I play poker, I sports bet, I play table games.
[94] Hearing Book Tab 4 [34].
[95] Transcript page 99.

Mr Tran’s answers to these questions struck me as highly calculated and evasive in circumstances where he was well aware that the Commissioner had expressed doubts about the source/s of other income he might have earned in the years in dispute. In 2017 he told the Commissioner that he intended to buy another business[96] but this was not in his statement. He told the Tribunal in his statement that, ‘the covid lockdowns and impacts prevented me in any meaningful way of pursuing my passion for playing poker. I have become interested in building and design and hope to pursue that interest.’[97] This evidence was contradicted under cross-examination where he admitted he was banned from the casinos in 2018.
[96] Hearing Book Tab 102.
[97] Hearing Book Tab 4 [12].
Ultimately, I was not confident given these events that Mr Tran was being honest with the Tribunal about his sources of income.
In all the circumstances, I have approached Mr Tran’s evidence with significant caution where it is not corroborated by independent records.
Mr Tran’s involvement in the preparation of his witness’s statements
Counsel for the Commissioner pointed to significant similarities between various witnesses’ statements filed in the proceeding. Mr Tran initially admitted he had provided a sort of ‘template’ to potential witnesses to encouraged them to give evidence about those transactions being loans/loan repayments. Further questioning then revealed that Mr Tran had sent lists of dates and transactions to potential witnesses following his review of his bank account statements, prompting them to recall and given evidence that these transactions were loans and repayments of loans.
What finally emerged was that Mr Tran had either written large parts or the whole of some witnesses’ statements concerning the alleged loans he gave to players, friends and family or shared templated wording with his witnesses.[98] Mr Tran did not deny his involvement:[99]
Counsel: This might be easier if I just do this at a broad level. You’ve previously told us that you gave Mr Trung the bank transfer dates and amounts that we see in his statement. Is that also the case for Lan and each of the other witnesses that you have called, that the lists of bank transfer dates and bank transfer amounts that we see in each of those statements, they came from you; you’ve provided those to the witness. Is that correct?
Mr Tran: Yes, I did, just to help them save time to go to the bank and ask. And I always tell them, ‘Please check, because if it’s incorrect, I want to know, too’.
Counsel: Some of the witnesses I think you said wrote their own statements, and some, you assisted them with their statements. So can you identify who are the witnesses that you’re still calling who wrote their own statements, and who got assistance from you in writing their statements?
Mr Tran: Well, almost everyone kind of needed assistance, because, you know, it’s been so long ago, and they’re, like, ‘What do I write’? Because, you know, most of them haven’t written a witness statement before, so - - -
Counsel: Well, perhaps it’s easier, then, if I just ask you, who are the people, who are the witnesses who didn’t get your assistance with writing their statements? Who did it themselves?
Mr Tran: I’m not quite sure, but there’s not many.
[98] The statements of Mr Wong Mr Kha and Mr Dao Hearing Book Tabs 15 and 28.
[99] Transcript page 216.
The Commissioner contends this last issue means or contributes to a view that Mr Tran is not a credible witness. I have already expressed reservations about Mr Tran’s evidence. My particular concern about this matter is that the extent to which Mr Tran’s interference rendered those witnesses’ evidence about the particular transactions unreliable in circumstances where there were very few independent records to corroborate the transactions to which they were referring.[100] None of these witnesses could be described as independent because they all knew Mr Tran or were related to him. The potential for him to have materially interfered in their evidence was borne out under cross-examination where a number of witnesses struggled to independently recall or explain the transactions in their statements. I have evaluated each witness’s evidence in these reasons but have also decided to approach the evidence about the unexplained deposits with caution where that was not corroborated by contemporaneous records (which was most cases).
PRIMARY TAX ISSUES
[100] Bosanac v Commissioner of Taxation [2018] FCA 946, per Steward J. Day v Perisher Blue Pty Ltd (2003) 62 NSWLR 731 at [30].
The onus and statutory burden which Mr Tran must discharge
Mr Tran told the Tribunal that he was not suggesting that the Commissioner acted unlawfully in raising the assessments and amended assessments. He just wanted to show that the assessments were based on incorrect assumptions and didn’t reflect what really happened in his case.
He told the Tribunal that he understood that his task was to prove the assessments were excessive and what his income was. He referred the Tribunal to George v Federal Commissioner of Taxation (1952) 86 CLR 183.[101]
[101] Mr Tran’s closing submissions [section 10]. the Commissioner referred the Tribunal to the decision of the High Court in Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614 where Brennan J cited George v FCT at 623 and also referred the Tribunal to Brennan J’s observation at 620 that the term ‘excessive’ in (now s 14ZZK) refers to the amount of the assessment.
Mr Tran has correctly described his task under s 14ZZK of the TAA. In Youssef v Commissioner of Taxation [2024] FCA 1154, a case with which Mr Tran is familiar, Perram J observed:[102]
George then sought a review in the Tribunal. His review was impacted by s 14ZZK(b)(i) of the Taxation Administration Act 1953 (Cth), which provides that on a review application (such as George’s) the applicant has the burden of proving ‘that the assessment is excessive or otherwise incorrect and what the assessment should have been’ (my emphasis). This provision meant that the Commissioner was not bound at the review hearing to prove anything, although he could if he so chose. Instead, the provision put in George’s path two hurdles both of which he needed to surmount. First, he had to show that the assessments were excessive or incorrect, for example by demonstrating that some payments to him treated by the Commissioner as income were, in fact, capital in nature. Secondly, he had to show what his taxable income actually was.
George successfully cleared the first hurdle by showing that the assessments were to some extent excessive. But he failed at the second because he did not establish to the Tribunal’s satisfaction what his assessable income was.
[102] [7]-[8].
The standard of proof which Mr Tran needs to meet in each aspect of his application to this Tribunal challenging the assessment is the civil standard; that is, a state of satisfaction on the balance of probabilities where he bears the onus of satisfying the Tribunal.[103] Steward J in Commissioner of Taxation v Cassaniti[104] with reference to Allied Pastoral Holdings Pty Limited v Federal Commissioner of Taxation[105], explained in practical terms the task a taxpayer faces in discharging that burden:
… where the onus is on the taxpayer (whether pursuant to s 14ZZO of the TAA or otherwise) the degree or standard of proof required is that which ordinarily applies in civil proceedings. The direction given to a jury in civil cases aptly describes that onus by reference to a pair of scales and to the arguments of each party being placed at each end. As Hunt J said in Allied Pastoral:
…if the plaintiff succeeds… in weighing down those scales ever so slightly in his favour then he has discharged the burden he carries…
[103] McCormack v Federal Commissioner of Taxation (1979) 143 CLR 284 at 303 per Gibbs J where his Honour referred to previous authorities, George and McAndrew v Federal Commissioner of Taxation (1956) 98 CLR 263. The Respondent also referred the Tribunal to Gashi v Federal Commissioner of Taxation (2013) 209 FCR 301 at 314 [61]-[62]; Hua-Aus Pty Ltd v Commissioner of Taxation (2010) 184 FCR 430 at [22]-[23] citing Danmark Pty Ltd v Federal Commissioner of Taxation (1944) 7 ATD 333 at 337;
[104] [2018] FCAFC 212; (2018) 266 FCR 385; 109 ATR 119 at [88].
[105] [1983] 1 NSWLR 1
In seeking to meet that standard, a taxpayer in Mr Tran’s position cannot simply raise or infer matters without supporting evidence and effectively leave the Tribunal to draw inferences about a matter or to effectively investigate to calculate the taxpayer’s correct taxable income. They also need to do more than simply point to or raise ‘possibilities’.[106]
[106] The Commissioner referred the Tribunal to Re Day (2017) 91 AKRJ 262 at 268 [18] per Gordon J in support of the proposition that it is not enough to establish a fact for the taxpayer to engage in conjecture guesswork or surmise and Rawson Finances Pty Ltd v Federal Commissioner of Taxation (2013) 93 ATR 775 at [88]. Vu v Commissioner of Taxation 2006 ATC 4387; (2006) 63 ATR 341; [2006] FCA 889; Yung v Commissioner of Taxation [2012] AATA 872
Perram J referred (above, in Youssef) to the Commissioner’s task on review and importantly, the fact that the Commissioner is not obliged to establish that the assessments were correct. This principle is well established, as is the fact that a taxpayer in Mr Tran’s position will not succeed in his task by simply pointing out that aspects of the Commissioner’s assessment were incorrect. It is accepted that the Commissioner (who comes to an audit as a stranger to a taxpayer’s circumstances) may be required to make judgment calls, estimate or even guess at the correct tax position. As the Chief Justice of the High Court noted in Trautwein v Federal Commissioner of Taxation:[107]
In the absence of some record in the minds or books of the taxpayer, it would often be quite impossible to make a correct assessment. The assessment would necessarily be a guess to some extent, and almost certainly inaccurate in fact.
[107] (1936) 56 CLR 63 at 87 per Latham CJ; [1936] ALR 425 (Trautwein).
There are numerous other authorities which have addressed the how review under s 14ZZK should be approached and the Commissioner has directed the Tribunal to them in his closing submissions[108] but the most recent is the Full Court of the Federal Court’s decision in Commissioner of Taxation v Liang.[109] Liang is particularly relevant to this case given the Commissioner’s allegation (which Mr Tran denies)[110] that he has not disclosed all sources of his income. There, as in this case the Commissioner had taken issue with unexplained deposits. The Full Court observed:[111]
The heart of the Commissioner’s case before the Tribunal was that the source of the Deposits was not known. The Commissioner did not know whether the Deposits related to any activities conducted by the trustee of the Property Trust because he did not know where the Deposits had come from. Because the Commissioner did not know the source of the Deposits, the Commissioner did not know how the Trustee came to be entitled to those Deposits. The Commissioner did not know the precise scope of the activities undertaken by the Property Trust and whether those activities were only limited to the conduct of a property investment business.
[108] The Respondent also referred the Tribunal to the following in respect of the taxpayer’s obligation to prove their correct taxable income - Trautwein v Federal Commissioner of Taxation (No 1) (1936) 56 CLR 63 at 87 and 88;
[109] [2025] FCAFC 4 (Liang).
[110] Hearing Book Tab 4 [34]-[35].
[111] Ibid [23].
Approach to s 167 assessments where some or all the proceeds are alleged to arise from gambling
Had Mr Tran been legally represented in these proceedings, he might also have referred the Tribunal to the decisions of Walsh J and Burchett J respectively in Krew v Federal Commissioner of Taxation (1971) (Krew) (1971) 45 ALJR 249; (1971) 2 ATR 230; 71 ATC 4213; 2 ATR 230 and Ma v Federal Commissioner of Taxation (1992) 37 FCR 225 (Ma). Both of these cases concern assessments raised against taxpayers with alleged gambling wins and losses. Given the Commissioner is a model litigant[112] and Mr Tran is unrepresented, it was disappointing to see that he did not identify these cases in his closing submissions.
[112] In addition to his statutory obligation under s 56 of the Administrative Review Tribunal Act 2024 (Cth), the Commissioner has model litigant obligations pursuant to Appendix B to the Legal Services Directions 2017 (Cth). This extends to identifying relevant authorities even where those do not support the Commissioner’s position.
In Gashi, the Court referred to Ma as follows:
So, for example, in Ma v Commissioner of Taxation (1992) 37 FCR 225 at 230, Burchett J said that, in seeking to establish that an assessment under s 167 was excessive, that burden may be discharged:
‘… [I]f a taxpayer denies any undisclosed source of income, provides acceptable evidence of how he spends his time, and demonstrates a reasonable explanation for any appearance of the possession of assets, he will generally discharge his burden of proof unless some positive reason is shown why he is to be disbelieved. …’
Justice Burchett identified a number of steps – identification of sources of income, explanation of a taxpayer’s activities and an explanation of the source or sources of a taxpayer’s assets. The steps identified by Burchett J are not surprising. In addressing a s 167 assessment based upon an asset betterment statement, a taxpayer must account for an unexplained increase in assets. The taxpayer must explain the source or sources of those assets and then identify whether that source, or those sources, are taxable. Put another way, if the disclosed ‘actual’ taxable income does not explain the increase in assets, then the taxpayer is unlikely to have discharged the burden of establishing the assessment is excessive. And, of course, that unexplained increase in assets cannot be viewed in isolation – it must also take into account the expenditure during that period.
While the Commissioner has not used the asset betterment method in this case, Burchett J’s advice remains relevant where a net income methodology has been used, as in this case.
There were further pertinent warnings from Burchett J in Ma which are relevant to the task of the Tribunal in this case. In reflecting upon Dalco, Burchett J observed:[113]
It should not be overlooked that the error alleged in Dalco did not deny that the very sums erroneously characterised as income might in fact have been received in another character as income; here, by contrast, the error alleged, if made out, denies the receipt of the sums in question, being (at worst for the Applicant) simple re-bankings, in any character but that of capital.
And further, he observed:[114]
Furthermore, the making of estimates upon inexact evidence, which is so much a feature of both judicial and administrative decision-making, cannot be uniquely excluded from appeals against betterment assessments. To refuse to consider the credit, not only of the Applicant, but also of his independent and unchallenged witnesses, simply because the effect of the evidence was to support his accountant’s generalisations about double- counting rather than to hit upon the precise figure, was to fall into an error of law.
[113] Ma, page 232.
[114] Ma page 233.
In Krew, Walsh J, was willing to infer that particular transactions comprised the proceeds of gambling, based on their pattern, when considered in conjunction with Mr Krew’s evidence.[115]
[115] Krew at 241.
These authorities, together with the Federal Court’s recent observations in Youssef,[116] reinforce the task the Tribunal faces in a case such as this one where there are inadequate records for large scale activities. Much depends in this case upon the Tribunal’s evaluation of the evidence of Mr Tran and his witnesses. For his part, Mr Tran contended he had ‘gone the extra mile’ compared to Mr Youssef by leading evidence from his witnesses, preparing the worksheets, producing casino reports, showing some text messages and producing his bank records.[117]
[116] Youssef [21], [25].
[117] Applicant closing submissions, section 4.
Assessments under s 167 ITAA 36
Where the Commissioner is not satisfied with an income tax return lodged by a taxpayer, he is authorised by s 167 of Income Tax Assessment Act 1936 (ITAA 36) to make an assessment of the taxable income he thinks should be taxed and the assessment will become the taxpayer’s taxable income for the purposes of s 166 ITAA 36.
It is accepted that assessments issued under s 167 ITAA 36 bear fundamentally different characteristics to an assessment issued under s 166 ITAA 36.[118] This recognises that the Commissioner comes to an audit as a stranger to a taxpayer’s affairs and, in making the assessment, may not be in the full possession of the facts pertaining to the taxpayer. As a consequence, the assessments may necessarily involve judgement calls by the Commissioner. Consequently, assessments issued pursuant to s 167 of ITAA 36 are not to be treated as a proxy for calculation of a taxpayer’s actual income.[119] That said, they must be based on a reasonable rationale or basis using the information available to the Commissioner.[120]
[118] Commissioner of Taxation v Ross (in her capacity as the personal representative of the estate of Ross) and Anor (2021) 174 ALD 77 at [48]; [2021] FCA 766 (Ross).
[119] Ross at [75] per Derrington J.
[120] Commissioner’s opening submissions at 12.
In the present case, the Commissioner adopted the unexplained deposit method at audit by assessing the amounts of unexplained income as taxable income. He also gave notice[121] that considering the nature of the unexplained deposits to the joint account, and as permitted by s 167 ITAA 36, he was obliged in the conduct of the audit, to guess to some extent as to Mr Smith’s assessable income.
[121] Trautwein at 87 and Federal Commissioner of Taxation v Dalco (1990) 168 CLR 614 at 616 (Dalco). Also note the distinction assessment pursuant to s 166 and a Default Assessment issued pursuant to s 167; see Ross, [48] per Derrington J.
The cash transactions
I have inferred from the evidence that a significant proportion of Mr Tran’s dealings were in cash. As I have already noted, the Commissioner formed the view that he could quantify these transactions. I accept and find that they were also unquantifiable on the evidence before the Tribunal.
Mr Tran told the Tribunal that he kept a large cash float for gambling. As I have already noted, the evidence about his cash float was inconsistent. In addition to his cash float for gambling, Mr Tran also told the Tribunal he kept cash in his house ‘I have it – I have it in my bag, my house, on the table. I mean – and when I travel to Sydney, I carry cash, because cash is faster.’[122]
[122] Transcript page 229.
Mr Tran’s reliance on his cash as a balancing tool or explanation for his activities contrasted with his statement to the Australian Taxation Office in 2017 that,
I don't really keep a record of my gambling activities. I'll know how much I win according to how much money i (sic) have at the casino cage and my bank account.’[123]
[123] Hearing Book Tab 102.
The majority of Mr Tran’s alleged loans and gifts to family and friends were also made in cash and the money he gave to his wife for the property purchases – also cash. These are evaluated below.
Mr Tran also told the Tribunal he withdrew $80,000 from his cage account at Crown and used the money to purchase a BMW – to get a better price. I accept this transaction would be quantifiable if there were evidence of the purchase and the withdrawal from the cage account.
Then there were the repayments of alleged table loans by fellow players. A large number of his witnesses told the Tribunal they often repaid Mr Tran for table loans in cash or chips. As can be seen from Annexure A, most witness could not recall these amounts and there were no records of the transactions.

There was also a question around Mr Tran’s tendency to visit different suburban ATMs to make large cash withdrawals. Mr Tran told the Tribunal this was money for the casino, and it was quicker to withdraw from ATMs than to transfer to his cage account.[124]
[124] Hearing Book Tab 82, page 1521.
The pattern of these withdrawals was irregular, and I had difficulty accepting it matched Mr Tran’s explanation in evidence that he withdrew cash on the way to the casino (for example 4 x $20,000 withdrawals in one day from the same ATM). Further some withdrawals were well in excess of $100,000 and one for $200,000. These didn’t seem practical given he had a cage account into which these amounts could have been directly transferred. There were also large gaps of time between use of the ATMs in a number of cases.
Further and despite this explanation, Mr Tran told the Tribunal he did transfer money in and out of his cage accounts,[125] which calls into question why the ATM withdrawals were necessary. I could not be satisfied on the evidence that all these moneys made their way into his cage accounts.
[125] Transcript page 135.
The alleged personal loans – funds from third parties
Mr Tran told the Tribunal that during the years in dispute he made a large number of loans to 3^rd parties. These included:
(a)cash or chip loans made at the gambling table during games of poker (table loans);
(b)cash loans to friends or family members;
(c)gifts to third parties or family members.
Mr Tran conceded that he had not been able to identify and provide evidence about all the gifts and loans he had made during the years in dispute.
The Commissioner contends that if Mr Tran’s evidence were accepted, he would have loaned/given more than $11 million to third parties across the years in dispute – more than his estimated winnings. He submits that even if the Tribunal accepted Mr Tran’s evidence about his bankroll and winnings, he could not have afforded to make all these loans.[126]
[126] Commissioner’s closing submissions [166].
Table loans
Fellow players and casino employees gave evidence by statement and were cross examined about these loans.
The circumstances by which Mr Tran alleged they arose can be generally described as follows. During a game of poker, Mr Tran might agree to lend a fellow player chips at the table (either for the buy-in or to keep playing) and would pass chips to the player. Both fellow poker players and current and former casino staff told the Tribunal that Mr Tran frequently lent chips to other players (at the table) so they could continue to play.[127] Mr Tran told the Tribunal that at the time, both he and the borrower would usually send and keep messages on their phones eg ‘U owe me 50k or 100k’ or more commonly ‘U owe me 50 or 100’. He had not kept these records. Mr Tran explained the loans in this way:
.. because I do a lot of lending, and I also borrow, as you can see. But that’s because I earned that reputation where I always pay; I never not pay. And - and if someone doesn’t pay me, I will never send somebody to go and beat them up or anything, so I have a good reputation that - that I won’t pressure them. And I - I always pay my - my - my loan. And, mind you, we always pay each other within weeks, and sometimes month or two. But most people - they have money. They’re all big businessmen, and they’re all poker player as well. They’re all rich. They have money. It’s just that at the time, they’re out of funds because at the casino, you transfer just, say, 100,000, and you’ve finished. You go to transfer it again, and it will take a day or two. And, being gamblers, when you lose, you want that money straight away, so you can play again. You - you’re chasing that loss. And that is a skill that I have: when I’m losing, I actually don’t want to chase. And when I’m winning, I keep playing. And that is a skill that I have over a lot of players, because a lot of players, when they’re losing, they chase, and when they win, they want to stop, which is the wrong theory, because when you’re losing, you’re more angry; you tend to play not as good as your - yourself, and therefore, you will lose more often than not. So yeah, that evidence is very crucial to my - my case here, Senior Member, because I do this every day. If I could show you my phone now, because they’re not in that four years, but I still do this, because I - I’m not as much any more, but lending twenty, hundred k - hundred thousand, should I say - sometimes I’ll put the K there, but sometimes I don’t - but it’s very common.
[127] Hearing Book Tab 22 [2].
Many of these players told the Tribunal they would repay their loans in one of the following ways – by returning chips either same day or soon after, by paying cash – usually following a win. Alternately, they might deposit monies into Mr Tran’s Westpac account. I have evaluated their evidence at Appendix A.
To prove up these table loans, Mr Tran relied upon the deposit entries in his Westpac account, his bank statements the occasional corresponding bank record from the lender or their casino account records - showing they played on the dates on which they say the loan arose or that they withdrew cash from their cage accounts. There were also a few undated text WhatsApp and WeChat messages before the Tribunal[128] but Mr Tran conceded that these were small in number, stating that most messages were deleted when the loan was repaid. As I have already noted, the majority of the alleged loans were by cash or more commonly by passing chips at the poker tables and there were no records to corroborate these. Mr Tran simply could not remember what he had loaned to each player. For example:
No, 2013, just that year?---I don’t want to have a guess, but like I said, it’s high – hundreds of thousands to – to over a million that we passed, because we played - - -
In 2013. I’m talking specifically about that year?---If you ask me now, I can’t tell you exactly, but it’s – it’s a big amount. I’m not going to lie. Like, we played big games together during that time.
Approximately how much in 2013? Do you remember, or – it’s okay if you don’t. You can just say you don’t remember?---I don’t remember. I know it’s big amount.[129]
[128] Hearing Book pages 1402-1407.
[129] Transcript pages 218-219.
The casino staff and numerous other players who gave evidence[130] corroborated Mr Tran’s claim that he frequently loaned money to other players. However, the witnesses were only able to speak in general terms about having witnessed table loans being made. For example:
On frequent instances, seeing him pull out cash chips and loan them to players so they could continue playing.[131]
I remember numerous instances of other players losing their respective buyins, and Eddie having to lend them cash chips to continue playing. Eddie was always very kind and polite, always laughing and with a smile on his face.[132]
And another example:
And 2015?---You know, it’s high hundreds or low millions. I’m not quite sure. It just – it’s a lot of lending involved, so it’s hard to calculate.[133]
[130] See the evidence summaries at Appendix A to these reasons.
[131] Hearing Book Tab 22 [2].
[132] Hearing Book Tab 7 [2].
[133] Transcript page 226.
Kevin Ng, a professional poker player told the Tribunal of Mr Tran, ‘On most days he would lend out more than what he won, to the sum of hundreds of thousands of dollars.’[134] [my emphasis]. If this evidence were accurate, it would mean that over the years in dispute, Mr Tran would have loaned many tens of millions of dollars to other players. Such amounts were not supportable, even on the most generous estimates of what Mr Tran won and I cannot accept Mr Ng’s estimate as correct.
[134] Hearing Book Tab 30 [3].
I am however persuaded from the evidence that table loans of chips and cash occurred between Mr Tran and other players during the years in dispute. The Commissioner also conceded this is likely to have occurred.
However, for the following reasons, I cannot be satisfied that (1) each of the bank transfers into Mr Tran’s Westpac account as identified in the various witness statements represented repayments of loans of chips or cash and (2) that an even greater magnitude of loans occurred than was represented by these transactions and/or recorded in each player’s statement:[135]
[135] Transcript pages 81-84.
(a)In many cases, I was satisfied the witness’s recollection of the transaction/s was ‘triggered’ by Mr Tran who sent them transaction references using his Westpac account as a prompt and invited them to give evidence that they had deposited corresponding amounts of money in his account in repayment of a loan/s or, he partly or wholly wrote their statement. In such cases, I could not be confident that the witnesses’ evidence came from their own knowledge and recollection of these transactions;
(b)In some cases, it seems fellow players gave Mr Tran access to their cage account statements. Mr Tran denied that he matched transactions between these accounts and his Westpac accounts and his cage account to reconstruct transactions so the witnesses could provide evidence about them, but I find that evidence unpersuasive because it is precisely what he had done with his own Westpac account and cage account. Further when cross-examined, Mr Tran seemed to have no independent recollection of these loans and repayments in his spreadsheets, suggesting his entries there were not the product of his own recollection of events but simply consisted of assertions about what the transactions might represent.
(c)In most cases, the only available records to corroborate the witnesses’ statements were the bank statements for Mr Tran’s Westpac account and, in a few cases, a player’s own bank account statement and/or cage account statement. While these records showed a deposit or withdrawal had occurred, they did not contain sufficient information (such as narrations) to substantiate that loans existed or that the monies were repayments of loans;
(d)Many witnesses could only guess/estimate the total amounts they had borrowed and repaid because their evidence was that some repayments were made wholly/partly by cash or chips given to Mr Tran onsite at Crown or Star. There were no records for the latter;
(e)The magnitude of the figures Mr Tran was estimating/guessing in terms of the loans which he said were regularly occurring week by week, month by month and year by year of the years in dispute was so large as to be implausible, even if measured against the large amounts he claimed to be winning.[136]
(f)Mr Tran told the Tribunal in submissions that he kept records via text of ‘loans’ with other players on a rolling basis ie in the same game, he could be borrowing from the same players he lent to. These texts no longer existed but his evidence suggests the transfers into his Westpac account (on his own evidence) could not always represent the full amount he had loaned to the other player;[137]
(g)Mr Tran told the Tribunal he sometimes acted as the middleman for loans eg a person would loan to Mr Tran but not directly to a VIP who they did not personally know;[138]
(h)In one case, James Siu, told the Tribunal that when approached by Mr Tran, he had taken advice from his accountant to make sure he wasn’t ‘in trouble’ and that his income could cover the alleged $40,000 loss/loan he was deposing to in ‘a letter for a friend’.[139] My concern about this was the risk that Mr Siu (not recalling the amount) may have been motivated to assist his friend and given evidence to match the bank account statement Mr Tran had produced to him;
(i)In another case (Nhan Di Pho Vo) I was again concerned that the witness’s evidence was unreliable. Mr Vo could not tell the Tribunal how he came to ‘owe’ Mr Tran $800,000. In fact, the amount Mr Tran had calculated as owed was $811,478. Neither amount matches entries disclosed in casino records exhibited to Mr Vo’s second statement or to the amounts set out in his first statement.[140] Mr Vo admitted under cross examination that he saw Mr Tran’s spreadsheet[141] in preparing his statement and Mr Tran admitted he helped Mr Vo with his statement. Once again, I was concerned that Mr Vo was motivated to assist Mr Tran, even though he did not independently recall the transaction in issue;
(j)Some of the evidence about the source of the monies used for some of the alleged repayments was also suspicious. In one example (Wan Yong Nguyen), the Tribunal was presented conflicting evidence about how a ‘friend’ from China had loaned this player more than $223,700 in cash at the casino restaurant and then had accepted repayment into his Chinese Bank account in China. Mr Nguyen changed his evidence a number of times under cross examination and then claimed, ‘not to remember’ the name of the ‘friend’. He then attempted to end the cross-examination rather than answer further questions about the repayment.[142] I could not accept Mr Nguyen’s evidence as reliable, absent corroborating records (there were none);
(k)Mr Tran had earlier told the Tribunal that some witnesses did not want to admit to frequently borrowing from him. He said Mr Nguyen for example, had borrowed and repaid similarly large amounts many times.[143] Mr Tran had not mentioned in his statements that Mr Nguyen had borrowed such large sums of money from him. It seemed suspicious that he had not previously thought to mention such large amounts when his task was to explain what his correct income was.
[136] Transcript page 286.
[137] Transcript pages 73 and 174, 176, 179.
[138] See for example Transcript pages 81-82, 85.
[139] Transcript page 729.
[140] Hearing Book Tab 32; Hearing Book Tab 33; Transcript pages 448-449.
[141] Hearing Book Tab 32 [6] and Transcript page 451.
[142] Transcript pages 815-818.
[143] Transcript page 260.
To compound the problems with this category of evidence:
(a) Mr Tran’s own recollection of these transactions appeared to have come from a review of his bank statements for the purpose of preparing the spreadsheet, as opposed to his independent memory of them having occurred;[144]
(b) Mr Tran conceded there were a large number of people who he alleged had repaid loans to him but had not provided evidence;[145] and
(c) As I have already noted, Mr Tran had ‘assisted’ the witnesses to identify the amounts deposed to in their statements.[146] In the case on Wan Yong Nguyen, he had actually written his statement for him.[147]
[144] Bosanac v Commissioner of Taxation [2018] FCA 946 at [33]-[34] where Steward J observes the danger attaching to exercises in reconstruction.
[145] Hearing Book Tab 4 [44].
[146] See for example the evidence of Mr Siu at Transcript pages 718-719.
[147] Transcript page 809.
Ultimately, in the absence of corroborating records, I could not be confident that all the amounts identified by the other poker players were in fact loan repayments. Nor could I be confident what amounts had actually been borrowed and repaid over the years in dispute as a result of table loans. I could also not be confident given the evidence about the source of monies some witnesses had used to pay/repay Mr Tran.
The alleged personal loans to friends and family
Gifts/loans to Mr Tran’s wife and payments back to his Westpac account
Mr Tran did not operate a joint account with his wife. Instead, he told the Tribunal that if he needed to borrow from her, he would request a transfer to his Westpac account.[148] Mr Tran also gave money to his wife. Some were cash transactions.[149] Others, the Commissioner thought were suspicious. These were round robin transactions between his Westpac account and his wife’s account whereby the amounts advanced were returned days later with a small increase – for reasons which were not explained. The amounts were not small ($200,000, $180,000, $200,000 x 2). At the time they occurred, Mr Tran’s wife was not employed.
[148] Ibid.
[149] The cash given to his wife for property purchases for example. See Transcript page 105.
Mr Tran had told the Tribunal in his statement:
The source documents disclose numerous transfers to and from Jammi’s accounts and my Westpac accounts. I did not personally access Jammi’s accounts. When I needed money from her I would ask her to make transfers for me. I considered these transfers between me and my wife were gifts between husband and wife.
Under cross examination, Mr Tran could not explain the reason these amounts were returned to his Westpac account within days of being paid – sometimes with additional amounts.[150] He said he presumed they were gifts to his wife from poker winnings, for looking after the kids or for driving them around.[151]
[150] Transcript pages 180-182.
[151] Transcript page 91, 180-181.
Even allowing for Mr Tran being a bad record keeper and manager of his money, this explanation is implausible, and I am not persuaded by it. These were substantial amounts of money moving back and forth within short timeframes. His answers did not adequately explain why the moneys were repaid within days.
Mr Tran’s wife was not called to given evidence. I infer from her absence that her evidence would not have supported Mr Tran’s explanation of these transactions.
Loans to family and friends
Mr Tran told the Tribunal that he was very generous to his family and friends but did not typically keep records of any loans he made to them. Mr Tran and some family members and friends gave evidence about these transactions. There were no corroborating records of the alleged transactions apart from bank statements recording bank transfers into Mr Tran’s Westpac account. All the gifts and loans from Mr Tran to family and friends appear to have been made in cash.
Mr Tran said, ‘From my perspective it was up to them if, and when close friends and family paid me back.’[152] One example of this was his evidence about payments to his father-in law:
So I always give him, you know, a good amount of cash for them to spend, or gamble, or whatever. I don’t expect it back.[153]
[152] Ibid [16].
[153] Transcript page 217.
The witnesses giving evidence in this category all conceded that Mr Tran had assisted them with their evidence (for example, by presenting them with transactions and asking them to corroborate the payments with a statement). Not all appeared to be confident in their recollections of these transactions.
Quoc Ke Tran
One of those witnesses was Mr Tran’s brother, Mr Quoc Ke Tran. Quoc Ke Tran described himself as a share trader. He said he had borrowed amounts for gambling and share trading from Mr Tran. In his statement, he said he had stopped gambling because of the losses but under cross-examination said he could not recall whether on balance he won or lost at gambling.[154]
[154] Hearing Book Tab 35 [2] and Transcript page 509.
The monies in question were supposedly paid to him in cash over a long period of time. In his statement, Quoc Ke Tran had said he borrowed $150,000 and had been given $30,000 in gambling chips but then under cross-examination, he had difficulty recalling both the total amount and when each of the amounts was loaned.[155] Quoc Ke Tran told the Tribunal he made the repayments into Mr Tran’s Westpac account which he detailed in his statement and conceded he had identified these with Mr Tran’s assistance and verified them with his bank.[156] Quoc Ke Tran conceded he did not know the source of the monies Mr Tran originally gave him but presumed they were from his poker winnings.[157]
[155] Hearing Book Tab 35 [2] and Transcript pages 509-511.
[156] Hearing Book Tab 35 [2]-[3].
[157] Transcript page 512.
Mr Tran told the Tribunal he gave $50,000 to his brother in 2013 but could not say what it was for. When asked how he could have afforded this gift in 2013 he said it was from gambling winnings.[158] Quoc Ke Tran did not explain why the small amount remaining of his ‘debt’ had not been repaid since 2017 (7 years) but said he still intended to repay it.[159]
[158] Transcript page 228.
[159] Hearing Book Tab 35 [3].

Mr Tran opposed the penalty on the following grounds:
The ATO’s approach to apply a blanket 75% penalty is overly aggressive. They didn’t look at the full picture. They didn’t consider that most of these transactions were repayments, loans, or chip swaps. They treated informal trust – based interactions between poker players like they were business contracts. That’s not how this world works and the evidence from those who lived it with me proves that.
Yes, I didn’t lodge tax returns in the early years but I wasn’t earning income in the sense the law intends. I wasn’t employed and I didn’t believe poker winnings were taxable, and that belief was genuinely held. That’s not fraud. That’s an honest mistake made by someone outside the legal and accounting world.
The legislation
Section 284-75 relevantly provides:
284‑75 Liability to penalty
(1) You are liable to an administrative penalty if:
(a)you make a statement to the Commissioner or to an entity that is exercising powers or performing functions under a *taxation law (other than the *Excise Acts); and
(b)the statement is false or misleading in a material particular, whether because of things in it or omitted from it.
…
(3) You are liable to an administrative penalty if:
(a)you fail to give a return, notice or other document to the Commissioner by the day it is required to be given; and
(b)that document is necessary for the Commissioner to determine a *tax-related liability (other than one arising under the *Excise Acts) of yours accurately; and
(c)the Commissioner determines the tax-related liability without the assistance of that document.
Section 284 – 90 (1) (item 1) of schedule 1 to the TAA relevantly provides:
284‑90 Base penalty amount
(1) The base penalty amount under this Subdivision is worked out using this table and subsections (1A) to (2), and section 284‑224 if relevant:

216.    Base penalty amount

217.    Item

218.    In this situation:

219.    The base penalty amount is:

220.    1

221.    You have a *shortfall amount as a result of a statement described in subsection 284‑75(1) or (4) and the amount, or part of the amount, resulted from intentional disregard of a *taxation law (other than the *Excise Acts) by you or your agent

222.    75% of your *shortfall amount or part

216. *Base penalty amount*
220. 1	221. You have a shortfall amount as a result of a statement described in subsection 284‑75(1) or (4) and the amount, or part of the amount, resulted from intentional disregard of a taxation law (other than the *Excise Acts) by you or your agent	222. 75% of your *shortfall amount or part

Section 284 – 220 of schedule 1 to the TAA relevantly provides:
284‑220 Increase in base penalty amount
(1) The *base penalty amount is increased by 20% if:
(e) your liability to a penalty arises under subsection 284‑75(3) and you were previously liable to a penalty under that subsection.
Section 14ZZK of the TAA is also applicable to penalty. Mr Tran also bears the onus in establishing that any penalty imposed was excessive.
The 2014, 2015 and 2016 years
Section 284-75(3) of Schedule 1 of the TAA is relevant to the penalty imposed for these years. Mr Tran says he failed to lodge his tax returns for these years because he assumed his gambling was a hobby which is not subject to taxation.
It is not disputed that Mr Tran was invited by the Commissioner to lodge returns for the 2014, 2015 and 2016 income years but declined to do so. Nor is it disputed that the Commissioner then determined his audit position, absent these records. Mr Tran has been assessed for tax based on the shortfall the Commissioner identified from his audit of his accounts.
I acknowledge Income tax Ruling IT 2655 Income tax : betting and gambling - whether taxpayer carrying on business of betting or gambling[231] is a publicly available document which sets out the Commissioner of Taxation’s views as to when gambling will and will not constitute the carrying of a business. IT 2655 does not provide blanket protection for a gambler but does provide guidance about the circumstances in which gambling winnings are more likely to be subject to tax.
[231] IT 2655 | Legal database
Mr Tran told the Tribunal that he assumed, absent detailed advice that he did not need to lodge returns. He says this was solely based on his assumption that his gambling winnings were not taxable. The evidence suggests he did not seek detailed advice about his overall tax position when selling his café and deciding not to seek other employment so he could devote his time to gambling. His evidence was that he only sought advice in 2017 once the tax audit commenced.[232]
[232] Mr Tran suggested he spoke to his accountant in 2017 Transcript page 61. However, see also Transcript page 54 and Hearing Book Tab 4, [11] which suggest he spoke to his accountant prior to 2017. Ultimately under cross examination he told the Tribunal he did not seek advice until 2017, Transcript pages 119-120.
The Tribunal has considered Mr Tran’s evidence about his gambling winnings, the chip swaps and the alleged loans and repayments. The Tribunal has not been persuaded that Mr Tran has accounted for the sources of all his taxable income and has found that Mr Tran has not discharged his onus under s 14ZZK of the TAA in respect of the Commissioner’s decision.
In the circumstances, where Mr Tran has failed to discharge his onus and has failed to lodge the returns, causing the Commissioner to determine his position absent any returns, I am not persuaded the penalty imposed for the 2014, 2015 and 2016 years under s 284-75 is excessive. Nor am I persuaded that there is a basis to disturb the decision to uplift the base penalty for 2015 and 2016 under section 284 – 220(1)(e) on the basis that Mr Tran was liable to a penalty under section 284 – 75(3) for the 2014 income year.
The 2017 year
The penalty for this final year was imposed on a different basis – a false or misleading statement in circumstances where the tax shortfall arose from intentional disregard of a taxation law.
The term ‘intentional disregard’ was considered by the Federal Court in Russell v Federal Commissioner of Taxation[233] where Logan J referring to observations by Collier J in Price Street Professional Centre Pty Ltd v Commissioner of Taxation (2007) 66 ATR 1 observed that it required, among other things,
an understanding by the taxpayer of the effect of the relevant legislation or regulations, an appreciation by the taxpayer of how that legislation or regulation applies to the circumstances of the taxpayer, and finally, deliberate conduct of the taxpayer so as to flout the ITAA 1936 or regulations. [234]
[233] Russell v Federal Commissioner of Taxation [2009] FCA 1224; 74 ATR 466 (‘Russell’).
[234] Ibid [180], per Logan J.
While I acknowledge Mr Tran’s evidence that he made a mistake and assumed gambling winnings were not taxable, he has been assessed on the basis of unexplained income the Commissioner has identified across the years in dispute. Mr Tran has not discharged his onus in respect of providing an account for these monies and there are significant amounts in issue. I have not been persuaded on the available evidence that Mr Tran has accounted for all his income.
In conducting his arrangements, Mr Tran has failed to keep any records of his activities (including what he said were significant amounts passing at the poker table in chip loans), and that he implemented and maintained cash-based arrangements for transacting with family, third parties and other players making it very difficult to ascertain what monies were received and paid out by him. His bank records have also disclosed that he received a significant volume of deposits, and not all of these have been explained. He also engaged in unexplained round robin transactions with his wife (also not explained), and despite having led evidence about amounts he received from the Family Trust he has not provided an adequate explanation for these transactions.
Mr Tran has also not adequately explained why he told the Australian Taxation Office he was involved in property development but subsequently has denied knowledge of the property development activities carried out by the Family Trust. Before the Tribunal, Mr Tran was highly evasive about whether he gambled full time. The amounts Mr Tran has suggested he won at poker and loaned to third parties are unsubstantiated by records and in some cases, his own witnesses.
There was no evidence before the Tribunal to suggest that Mr Tran was reckless or careless in arranging his affairs in this manner or in failing to fully account for his income.
I acknowledge that Mr Tran told the Tribunal he had conferred with his accountant about his gambling winnings in 2017 but there was no evidence that he had sought timely advice about his circumstances and disclosed all his circumstances.
In the circumstances, and on the evidence provided, I am not persuaded there is a basis to find the penalty assessment for 2017 is excessive.
For completeness, I note that s 284-75(6) of Schedule 1 to the TAA which provides safe harbour from penalty for advice provided by a tax agent, does not apply in circumstances where a false or misleading statement results in intentional disregard.
Remission of penalty
Section 298-20 of Schedule 1 to the TAA gives discretion to the Commissioner to remit penalty. The Commissioner’s discretion is broad and can extend to remission of part or the whole of the penalty. In considering whether to remit penalty, the Commissioner must consider all taxpayer’s particular circumstances.[235]
[235] Sanctuary Lakes Pty Ltd v Commissioner of Taxation (2013) 213 FCR 483; [2013] FCAFC 50, per Greenwood J at [157] and [192], and per Griffith J at [249].
Mr Tran asked for the penalties to be set aside. He is unrepresented and I apprehend the reasons he has provided (above) about penalty were also intended to support his case for remission as no specific submissions were made on the subject.
On all the available information and in the circumstances, the Tribunal is unable to identify anything in Mr Tran’s circumstances or otherwise which would support a decision to remit part or the whole of the penalties imposed.
SHORTFALL INTEREST CHARGE (SIC)
Mr Tran had sought review of the Commissioner’s decision that his objection to SIC was incompetent. The basis for the Commissioner’s decision was that Mr Tran could not lawfully object to the SIC imposed on the basis that it was not more than 20% of the additional tax imposed:
280‑170 Objecting against remission decision
You may object, in the manner set out in Part IVC, against a decision of the Commissioner not to remit an amount of *shortfall interest charge you are liable to pay on an additional amount of income tax, *petroleum resource rent tax, *excess non‑concessional contributions tax or *Division 293 tax, if the amount of the charge that was not remitted is more than 20% of the additional amount.
The Commissioner has submitted that as far as Mr Tran’s application to the Tribunal refers to SIC, it is incompetent because Mr Tran’s right of review is founded by s 14ZZK of the TAA which requires the decision which is the subject of review to be a ‘reviewable objection decision’.
I accept the Commissioner’s submission as correct.
Mr Tran’s complaints about the Respondent’s conduct
Mr Tran complained to the Tribunal in his closing submissions about the conduct of the Respondent’s legal team. He contended that the examination of his witnesses was leading, aggressive, technical and relentless. However, he did not suggest he had been denied procedural fairness. To the contrary, he contended that his witness’s credibility was improved by their responses to questions under cross examination.
There are always challenges in a hearing where one party is represented and the other is not. It is difficult for an applicant without legal training to appreciate the hearing process. As per its objectives in s 9 of the ART Act, the Tribunal tries to work flexibly with parties in a fair and just manner, in accordance with their needs. However, evidence needs to be tested and as the Tribunal explained to Mr Tran throughout the hearing, counsel for the Commissioner was obliged to put to witnesses, matters about which he would submit the Tribunal should make adverse findings.
With the exception of one issue, the Tribunal was assisted in this proceeding by the Respondent’s approach to his model litigant obligations during the hearing process. That one issue concerned the attempt to allude to illegal activity by providing without notice to Mr Tran a media article in the course of cross-examination.
If the Commissioner of Taxation wishes to develop arguments about potential illegality, it needs to take care about how those questions and any evidence are managed in the conduct of proceedings, particularly where the applicant is without legal representation. I have not had regard to those questions, Mr Tran’s answers or the media article in question in my reasons.
The Commissioner is a model litigant. To the extent Mr Tran considers there is any proper basis for a complaint about any of his conduct in these proceedings under Appendix B to the Legal Services Directions 2017 (Cth) he may make that complaint in writing to the Australian Taxation Office.
Concluding comments
The circumstances of this case posed a risk for Mr Tran who claimed to be supporting his entire family solely from his poker winnings and had not lodged his tax returns. By not keeping records of his gambling winnings, there was a significant risk that Mr Tran would not be able to account for the significant volumes of money flowing through his bank accounts. That risk was recently identified by the Federal Court in Youssef[236] and has come to pass in Mr Tran’s case as well.
[236] [122].

Date of hearing: 5 -16 December 2024 and 8 Aril 2025

Date final submissions received: 7 April 2025

Solicitors for the Applicant: Nil

Solicitors for the Respondent:
ATO, Litigation and Legal Services

ANNEXURE A
OTHER WITNESSES WHO GAVE STATEMENTS AND WERE CROSS EXAMINED IN THE PROCEEDING

Name	Role
*The gamblers*
General evaluative observations	These witnesses were not independent of Mr Tran. Most had a long association with him and also an interest in assisting him to a positive outcome on his tax dispute. Mr Tran ‘assisted’ most of these witnesses with their evidence. Nearly all had no independent recollection of the deposits in question. Many had also undertaken table loans with Mr Tran for chips and cash. There were few or no records of nearly all the deposits and there was no way to ascertain when the alleged loan had been made. While some witnesses were more forthcoming than others, I am not persuaded absent corroborating and contemporaneous records that they establish loans were made for the amounts reflected in the deposits referred to. I am not persuaded that cage account statements which show withdrawals are sufficient to establish loan repayments to Mr Tran. However, I do accept that the evidence establishes that table loans were made often by high stakes poker player. These were usually settled it seems by cash and chips.
Hai Bo Chu[237]	*Summary of evidence* First met Mr Tran in 2005 at Crown.[238] Confirmed players loaned each other mostly cash and chips[239] at the poker table but couldn’t give specific examples or dates or amounts.[240] He confirmed records were not kept.[241] He also confirmed players sent texts to each other.[242] Under cross-examination Mr Chu was asked about how on his small winnings he could afford to repay loans of 1.95M.[243] In his original statement to the Commissioner he had not mentioned the loans.[244] He conceded that Mr Tran helped him to remember transactions for his statement and the ‘format’ of his statement.[245] However he said the transactions were a long time ago ‘Again, it's, like, many years ago, so it's a little bit hard to determine the exact amount’.[246] He said the larger figure comprised transfers and cash out figures from his cage account which he had calculated.[247] He conceded he could not confirm the cage account withdrawals comprised loan repayments.[248] Under cross examination, Mr Chu could not recall specific payments or explain the $1.95M figure in his statement. He was evasive under cross-examination about how the figure for the loans had been derived but eventually conceded Mr Tran ‘kind of helped’.[249] His statement refers the reader to Mr Tran’s spreadsheet for further information about the transactions.[250] Mr Chu conceded the bank statements would not record any payments in cash or chips.[251] Under cross-examination it became apparent that Mr Chu was referring to notes before him in the form of a supplementary draft statement. The Tribunal obtained a copy, and it was admitted into evidence.[252] He said Mr Tran helped him to remember things about the transactions and this was included in his evidence.[253] *Evaluation* Mr Chu’s answers to questions were evasive and his evidence lacked the necessary detail to satisfy me that he proved the loan repayments to which he referred. The Tribunal was unable to place much weight on Mr Chu’s recollections about the alleged loans. The transactions were also suspicious because Mr Chu did not appear to have the financial means to personally repay the amounts he had listed. In any event, Mr Chu’s conceded that cash and chip transactions were not included in his estimate of the amounts loaned in his statements. Ultimately, his evidence was based on transactions presented to him by Mr Tran and so I could not play significant weight upon his evidence, other than to corroborate in the most general of terms that players (including Mr Tran) loaned each other cash and chips at the poker table.
Joe Hachem[254]	Professional gambler and winner of Aussie Millions Gambling Tournament. Mr Hachem often played poker with Mr Tran. Mr Hachem estimates Mr Tran won ‘many millions of dollars’ from poker. He said ‘the guy just won so much money it was ridiculous. It was actually outside a normal standard deviation, how much he won.’[255] However, he could not say exactly how much Mr Tran won or lost and readily conceded he had not kept any records of the games he played with Mr Tran.[256] Mr Hachem witnessed Mr Tran ‘strategically’ lending chips to players to keep the games going’.[257] He told the Tribunal he could name names but could not provide specific records of loans Mr Tran made to other players.[258] He corroborated Mr Tran’s evidence that loans at the table were usually only recorded by handshake and ‘some texts’.[259] Evaluation Mr Hachem was open and precise in his answers to questions. He was a strong and credible witness. He acknowledged he was unable to provide evidence of the loans Mr Tran made or his winnings but did corroborate Mr Tran’s evidence in general terms that loans were given, usually without any record other than a text.
Thanh Huy Lam[260]	Part of Mr Tran’s circle of friends and fellow player. He told the Tribunal he borrowed ‘just over $200,000’from Mr Tran.[261] He contended he had repaid $143,000 in cash and bank transfers[262] but says the majority of payments were in cash.[263] He conceded he no longer had any records of the loans.[264] He told the Tribunal Mr Tran loaned him chips but conceded he could not be certain of their source.[265] He told the Tribunal he still owed Mr Tran $18,800.[266] Evaluation Mr Lam was frank in his answers to questions and conceded the limitations in his evidence. He acknowledged some loans made to him were for cash and there were no records of them. He also acknowledged he could not vouch for the source of the chips Mr Tran loaned to him. Once again, this witness’s evidence corroborates Mr Tran’s evidence that players made loans at the poker table but lacks the required particularity to be reliable to vouch for detailed amounts as comprising loan repayments. This is particularly so because Mr Tran and Mr Lam did not give consistent evidence about how much Mr Tran had loaned to Mr Lam and how much was still owing.[267]
Andy Hun Wei Lee[268]	Met Mr Tran at Aussie Millions Tournament in 2010 and played with him in private cash games at Crown and Star. On 2 occasions, he saw Mr Tran win pots of more than $1m and he saw him regularly win $200,000-$300,000 pots. He described him as skilful and lucky.[269] He borrowed chips from Mr Tran at the poker table on occasion. He also said he paid Mr Tran $189,000 from his cage accounts but also told the Tribunal he repaid loans ($289,180 by bank deposit) and then said he guessed he may have borrowed $300,000-$400,000 per year from Mr Tran. He conceded he could not recall specific dates or amounts borrowed.[270] He conceded that Mr Tran helped him with his statements by providing the list of bank transfers to him and that he cannot recall any specific transactions. Evaluation Mr Lee acknowledges he cannot precisely recall amounts or dates of loans. The specific amounts itemised in his evidence do not reflect the extent of his alleged loans and he can only recall amounts he has sourced from bank transfers. On his own evidence, Mr Lee has not explained all the alleged transactions which occurred between him and Mr Tran. Mr Lee annexed statements from his cage accounts to his second statement but these are heavily redacted and only show that amounts were withdrawn from the accounts ie they do not prove payment of cash to Mr Tran.[271] Once again, this witness was assisted by Mr Tran. His evidence lacks essential detail such that I am not satisfied it proves that the transactions identified were loan repayments.
David Lim[272]	Met Mr Tran at Crown in or around 2013. Played with Mr Tran at various private games since 2014. Borrowed mostly chips and money from Mr Tran during the years in dispute. He told the Tribunal he had repaid Mr Tran $160,000 in deposits and estimated/guessed cash payments of around $300,000 between 2013 and 2016 in chips and money from his cage account. He conceded Mr Tran had provided amounts to him which he checked and that he has estimated the amounts he has borrowed. Evaluation Mr Lim’s recollection of what he borrowed was influenced by Mr Tran’s assistance and one Mr Lim’s own evidence was just a guess. In the absence of corroborating records, the Tribunal cannot place much weight on Mr Lim’s evidence, other than in the most general terms as further corroboration of Mr Tran’s evidence that players borrowed from each other.
Peter Ling[273]	Told the Tribunal he was a close friend of Mr Tran since 1995. He corroborated Mr Tran’s evidence about his share of the Aussie Millions winnings from 2008.[274] Mr Ling told the Tribunal he estimated he had borrowed $300,000 from Mr Tran, mainly in chips but also cash.[275] However under cross-examination, Mr Ling conceded Mr Tran had given him this figure and had also provided guidance about what Mr Ling should say in his statement.[276] He had no corroborating records of any loans. He told the Tribunal, he repaid Mr Tran’s loans in a combination of bank transfers, cash and chips.[277] He said he did not really play poker with Mr Tran beyond 2013-2014.[278] Evaluation Mr Ling corroborates Mr Tran’s evidence about the Aussie millions’ winnings but otherwise his evidence about the deposits he says he made as repayments has come from Mr Tran who assisted him to prepare his statement and so absent corroborating records, his evidence must be viewed with caution. There are no corroborating records for the cash and chip repayments, the size of which are unknown.
Kevin Ng[279]	Professional poker player who played full time from 2012 to 2018.[280] He told the Tribunal he met Mr Tran in or around 2013 when he travelled to Australia for the Aussie Millions Tournament. He came to Australia a few times each year to play poker. He played some private games with Mr Tran and others.[281] He observed Mr Tran regularly loaning large amounts – more than he won – hundreds of thousands.[282] Mr Ng described how both he and Mr Tran would ‘encourage’ new players – rich and friendly people – to join to increase their chance of winning. He described this as a commonly employed strategy.[283] Mr Ng said he borrowed chips from Mr Tran and would also loan him cash or chips but confirmed he had no records. He also had no records of the games he paid with Mr Tran or what the various players won or lost.[284] The amounts Mr Ng referred to in his statement as comprising loans were large ($100,000, $40,000 and $60,000) but he did not provide precise evidence of these amounts. Evaluation Mr Ng was open and responsive in his answers to questions but could not provide corroborating evidence about precise amounts won or lost, loaned, or repaid. The tenor of his evidence was that Mr Tran loaned large amounts to him and other players but without any evidence of precise amounts loaned, repaid, won or lost, his evidence only corroborates in general terms that Mr Tran and others loaned cash and chips and usually repaid their loans.
Bill Seri[285]	Met Mr Tran in around 2007 to 2008. He played private poker games in around 2013/14. He described Mr Tran as an exceptional poker player.[286] He recalled being present with Mr Tran when he won large amounts on various occasions which he listed in his statement (but did not list amounts won).[287] He did recall him winning $100,000 pots on many occasions.[288] Mr Seri said he borrowed chips from Mr Tran. He said he would repay in chips or cash but did not identify amounts. He told the Tribunal there were no records of these transactions.[289] Mr Seri said his statement was all his own writing.[290] Evaluation Mr Seri’s evidence corroborates the view that Mr Tran was a successful player and also confirms that he loaned chips at the poker table but provides no cogent or verifiable evidence of events and amounts loaned.
James Siu[291]	Restaurant owner who met Mr Tran at Crown in 2010. He required assistance from a translator. He denied that Mr Tran wrote his statement but acknowledged all the transaction detailed were provided by Mr Tran and that Mr Tran ‘helped him’.[292] He told the Tribunal Mr Tran loaned him money but mostly chips (usually $5,000 to $10,000 per time). He calculated he borrowed more than $220,000 between 2015 and 2017. He said he repaid $160,000 in cash and chips and bank transfers totalling $62,000.[293] This did not correlate with Mr Tran’s estimates of what Mr Siu had borrowed from him ‘$300,000 to 400,000, not quite sure.’[294] Mr Siu told the Tribunal he consulted his accountant to check his income could cover these expenses.[295] When questioned about why he needed advice about acknowledging a loan more than a year after he had allegedly repaid it, he gave evasive answers but I inferred that he wanted to make sure his reported income could support such a substantial loss ‘needed the accountant’s help to make sure that I was not in trouble’.[296] It transpired that Mr Siu did not own his chain of restaurants as was implied in his statement.[297] Evaluation In the circumstances, and absent any corroborating records, I could not be confident that the amounts, Mr Siu told the Tribunal he owed Mr Tran were actually loans made on the poker table which were repaid. This was because Mr Siu appeared to have sought advice that his admission that he owed money to Mr Tran could be supported based on income tax returns he had lodged, so he could support his friend.[298] I also inferred from Mr Siu’s evidence that Mr Tran wrote his statement for him. This inference was supported by the fact that Mr Siu had difficulty with English and required an interpreter to give evidence to the Tribunal. In the circumstances, I could not safely rely on Mr Siu’s evidence absent corroborating records, of which there were none.
Jun Seong So[299]	Played poker with Mr Tran at Crown. He confirmed Mr Tran was very lucky but did not consider him skilled.[300] He told the Tribunal he borrowed ‘money’ in the amount of $147,540 between 2013 and 2016 which he repaid in bank transfers and also estimates he paid Mr Tran around $250,000 in cash and chips but has no records of these transactions.[301] He gave no explanation around the money he said he borrowed.[302] Mr So told the Tribunal that Mr Tran provided him with the dates and amounts to check against his bank statements.[303] He said he couldn’t recollect dates and payments but looking at the bank transactions they couldn’t be anything but money he borrowed for poker.[304] He produced no records to corroborate this evidence. Evaluation Mr Tran told the Tribunal he and Mr So loaned each other hundreds of thousands of dollars in cash and chips. Once again, Mr So’s evidence corroborates Mr Tran’s evidence that they loaned each other money at the poker table but there is no corroborating evidence from Mr Tran’s bank statements or otherwise that the transactions Mr So has identified in his statement were loan repayments to Mr Tran. Mr So did not produce his bank statements to the Tribunal. Mr So’s evidence suggests there were further cash and chip dealings between he and Mr Tran. When questioned about how he arrived at the amount of $250,000 for the cash and chip loans he admitted it was not accurate and he was just picking a safe amount.[305] There were also no records of these transactions making Mr So’s guesses unreliable because they were essentially an informed guess at the right amount.
Michael Micae Tran[306]	Met the Applicant in 2010 through a mutual friend and played private cash games with him at the Star but not the high stakes games because he could not afford them. He said he borrowed a few times between 2013 and 2017. He estimated (a bit of a guess) that he borrowed around $100,000 and repaid in bank transfers of $35, 560 and the balance in chips from the table. Evaluation Mr Tran’s evidence suggested he had loaned money from Mr Tran, but he was not specific about the extent of the loans and also suggested there were cash and chip payments (not just bank transfers). He admitted he was guessing how much he owed Mr Tran.
Tam Chi Truong[307]	Met Mr Tran in 2010. Like Mr Tran he said he was not working during the years in dispute and wasn’t doing much, just playing a lot of poker.[308] He played private games with Mr Tran, and they loaned to each other money.[309] He could not recall specific games he had played with Mr Tran, or the amounts Mr Tran had won.[310] Under cross examination he conceded it was mostly chips that were loaned.[311] He conceded Mr Tran assisted him with his statement by identifying the transactions he should check but suggested he used his own words in his statement.[312] Mr Truong conceded he could not remember making specific deposits to Mr Tran or borrowing the amounts he had identified in his statement.[313] He confirmed he had no records.[314] He could remember repaying Mr Tran with whatever was easy – like cash, chips bank transfers.[315] He said he guessed how much he owed Mr Tran.[316] Mr Truong said that Mr Tran was interested in playing poker with businessmen (people with money to burn – weak players). So, he could win more money.[317] Mr Tran could not remember exactly how much he loaned to Mr Truong and could not recall whether it was bank transfers, chips or cash.[318] He told the Tribunal he did use cash from his cage accounts to repay Mr Tran.[319] Evaluation I was not satisfied from his evidence that Mr Truong had any independent recollection of individual amounts he had paid to Mr Tran and Mr Tran had ‘assisted’ him to recall the payments he had identified. As such his evidence went no higher than the fact that there were table loans for cash and chips and that he did generally recall loaning money from Mr Tran but was guessing how much. His evidence suggested his statement did not address all his financial dealings with Mr Tran. He also confirmed Mr Tran was a successful player and his tactic of playing against whales.
Nhan Di Pho Vo[320]	Has played poker with Mr Tran for many years via Crown. He described himself as a property investor.[321] He confirmed players loaned each other money and chips at the poker table. He said he reviewed his records to see what transfers he had made to Mr Tran and had identified transfers of $45,000 and $5,000. He then mentioned that Mr Tran had identified a transaction of $811,475 from cash Mr Vo withdrew from his Crown and Star accounts. He mentioned seeing Mr Tran’s spreadsheet of transactions but denied helping Mr Tran to construct them.[322] He told the Tribunal he had worked out the amount from records he requested from the casinos. However, the records themselves only disclosed cash withdrawals and so were inconclusive.[323] Further Mr Vo gave inconsistent evidence about these withdrawals, and he failed to explain why he had to use a rough estimate of $800,000 in his first statement.[324] Evaluation Mr Vo’s evidence was disjointed and lacking in consistency and detail so as to be unreliable. My concerns about relying on this evidence were increased by the fact that Mr Vo had conferred with Mr Tran about his spreadsheet and then sought to identify large amounts cashed from his cage accounts as ‘loan repayments’ to Mr Tran. There was nothing in the cage account records which linked those cash withdrawals with Mr Tran.
George Youssef[325]	Has known Mr Tran for more than 10 years and played private poker games with him as well as betting on sports events with Mr Tran. He told the Tribunal from time-to-time poker players would give each other chips. He also estimates Mr Tran loaned him at least $200,000 in chips which he always paid back.[326]
Wan Yong Nguyen[327]	Chinese businessman who met Mr Tran at Crown in 2011.[328] He played private games with Mr Tran. He said that in 2017 he borrowed $223,700 in chips from Mr Tran and repaid him a few days later.[329] He claimed a ‘friend’ from China had loaned him more than $223,700 in cash at the casino restaurant and then had accepted repayment into his Chinese Bank account in China. Mr Nguyen changed his evidence about the alleged loan of the cash from his Chines friend a number of times under cross examination and then claimed, ‘not to remember’ the name of the ‘friend’. He then attempted to end the cross-examination rather than answer further questions about the repayment.[330] He had no records of the transaction.[331] Mr Tran told the Tribunal that Mr Nguyen borrowed much more money than he had disclosed in his statement.[332] Mr Nguyen admitted that Mr Tran wrote his statement for him.[333] Evaluation In the circumstances, I could not accept Mr Nguyen’s evidence as reliable, or credible, absent corroborating records (there were none). In any event, as Mr Tran wrote the statement, I cannot rely on it as representing his views. Further, the evidence in the statement is contradictory to Mr Tran’s evidence which suggests there were far greater amounts loaned than admitted by Mr Nguyen. Ultimately I could not be certain which witness was providing accurate and reliable testimony about Mr Nguyen’s alleged loan/s.
*The casino employees who were cross examined at the hearing*
Crown staff member [334]	Dealer at Crown during the years in dispute. Saw Mr Tran play and saw him lend money to other players. Saw Mr Tran win a pot where two players had bet $380,000. Told the Tribunal that a person carrying large amounts of cash in the casino might be suspicious depending on the context.[335]
Crown croupier[336]	Croupier at Crown. Met Mr Tran in 2009 when dealing poker. Said on many occasions he witnessed Mr Tran winning pots in the hundreds of thousands of dollars.[337] However he conceded he could not remember specifically when Mr Tran played.[338] He told the Tribunal players could buy chips from the tables.[339]
Star staff member[340]	Dealer at Star during the years in dispute in baccarat, roulette and poker. He frequently dealt at tables where Mr Tran played. He observed Mr Tran lending cash and chips to other players so they could keep playing. He described it as a casual arrangement.[341] Under cross examination he could not remember any details such as dates and amounts and parties to whom Mr Tran loaned cash or chips.[342] He identified the following as potentially suspicious behaviour which would be reported: [343] · Adding extra chips to the table; · Exchanging cash at the table; · Players walking through the casino with large amounts of cash – a risk of being robbed but also questioning where it came from.
*Family and friends to whom Mr Tran allegedly loaned or gifted cash*[344]
Simon Thanh Chen	Close friend of Mr Tran. Mr Chen played poker at Crown but not with Mr Tran. He played smaller games and borrowed $120,000 during the years in dispute in small amounts. He said he repaid Mr Tran in cash and chips when he could ie when he won. He told the Tribunal he had paid back $100,000 and still owes $22,750. He said he mostly repaid Mr Tran in cash and chips.[345]He said they kept a running balance through text messages but did not produce corroborating evidence of the loans,[346] even though he still owed Mr Tran money. He said he had repaid Mr Tran $100,000 through cash here and there in the last 10 years.[347] Mr Tran seemed unsure about what was owing, and repayments had been made by Mr Chen. He also could not say how much Mr Chen had borrowed.[348] Mr Chen gave conflicting evidence about when he started paying Mr Tran back (2017 vs 2019). Evaluation The evidence records payments to Mr Chen, not payments to Mr Tran.[349] The bank account mistake creates an inference that Mr Chen may not have draft his own statement. Under cross examination this was revealed and Mr Chan acknowledged he was referring to payments to Mr Tran, but the repayment dates are in conflict, and it seems most of the debts are for cash and chips. There is insufficient corroborating evidence to support Mr Chen’s claims about the debts and the repayments.
Con Dao[350]	Close friend of Mr Tran who said he has borrowed money from him to pay credit card debt and other bills. He referred to a cash loan[351] of $250,000 paid in multiple amounts which he is repaying.[352] He told the Tribunal he had repaid $49,000 in bank transfers and $70,000 cash. He told the Tribunal he still owes Mr Tran $90,000.[353] Mr Tran admitted he ‘assisted’ Mr Dao with his statement and gave him the amounts which he refers as repayments of loans at [4]. Further the wording of part of Mr Dao’s statement is the same as part of the wording of Mr Kha’s statement.[354] Mr Dao was evasive in his answers about the assistance Mr Tran had provided to him. Evaluation It was difficult to place much weight on Mr Dao’s statement given it was clear that Mr Dao could not have drafted at least [4] for him. Mr Tran’s recollection cast further doubt on its accuracy because he claimed (1)that he had lent around $150,000 to Mr Dao[355] and (2) that repayments were in bank transfers and chips.[356] Further, Mr Dao does not appear to have paid much of the ‘loan’ off between 2017 and the present time ($21,000).

[237] Hearing Book Tabs 19 and 20; Hearing Book Tab 74.

[238] Hearing Book Tab 19 [2].

[239] Transcript page 332.

[240] Transcript page 330.

[241] Transcript page 332.

[242] Transcript page 334.

[243] Hearing Book Tab 19 [5]. Transcript page 369.

[244] Hearing Book Tab 74, page 1385.

[245] Transcript pages 333 and 334.

[246] Transcript pages 332 and 333

[247] Transcript page 367.

[248] Ibid.

[249] Hearing Book Tab 19 [5]. Transcript pages 338-340.

[250] Hearing Book Tab 19 [4]. Transcript page 340.

[251] Transcript page 340.

[252] Exhibit A9 supplementary witness statement of Hai Bo Chu dated 29/08/2022.

[253] Transcript page 351.

[254] Hearing Book Tab 27; Hearing Book Tab 69; Transcript page 204.

[255] Transcript page 293.

[256] Transcript page 294.

[257] Transcript pages 292 and 294.

[258] Ibid.

[259] Transcript page 294.

[260] Hearing Book Tab 40.

[261] Hearing Book Tab 40 [4].

[262] Ibid.

[263] Transcript page 388.

[264] Transcript page 389.

[265] Transcript pages 388-399.

[266] Transcript page 386.

[267] Transcript page 216. Mr Tran told the Tribunal he thought he loaned Mr Lam around $100,000.

[268] Hearing Book Tab 8; Hearing Book Tab 9.

[269] Hearing Book Tab 74 [3].

[270] Transcript page 626.

[271] Hearing Book Tab 9.

[272] Hearing Book Tab 17.

[273] Hearing Book Tab 34.

[274] Hearing Book Tab 34 [2].

[275] Ibid.

[276] Transcript page 309.

[277] Hearing Book Tab 34 [2] and [4]. Transcript page 309.

[278] Transcript page 304, 308.

[279] Hearing Book Tab 30;Transcript pages

[280] Hearing Book Tab 30 [1].

[281] Ibid.

[282] Hearing Book Tab 30 [3].

[283] Transcript page 776.

[284] Transcript page 774.

[285] Hearing Book Tab 11.

[286] Hearing Book Tab 11 [3].

[287] Hearing Book Tab 11 [5].

[288] Hearing Book Tab 11 [4].

[289] Transcript page 826.

[290] Transcript page 823.

[291] Hearing Book Tab 24.

[292] Transcript page 719.

[293] Hearing Book Tab 24 [4].

[294] Transcript page 243.

[295] Transcript pages 729-733 and 741.

[296] Transcript page 718.

[297] Hearing Book Tab 24 [1]. Transcript pages 734-735.

[298] Transcript page 734.

[299] Hearing Book Tab 29.

[300] Hearing Book Tab 29 [3].

[301] Hearing Book Tab 29 [5]

[302] Hearing Book Tab 29 [4].

[303] Transcript page 585.

[304] Transcript page 581.

[305] Transcript page 589.

[306] Hearing Book Tab 31.

[307] Hearing Book Tab 39.

[308] Transcript page 425.

[309] Hearing Book Tab 39 [2].

[310] Transcript page 436.

[311] Transcript page 434.

[312] Transcript page 422.

[313] Transcript page 434.

[314] Ibid.

[315] Transcript page 434.

[316] Ibid.

[317] Transcript page 426, 430.

[318] Transcript pages 213-214.

[319] Hearing Book Tab 39 [4].

[320] Hearing Book Tab 32.

[321] Transcript pages 445-446.

[322] All the above comes from Hearing Book Tab 32.

[323] Transcript pages 450. Hearing Book Tab 33.

[324] Transcript page 451 and Hearing Book Tab 33.

[325] Hearing Book Tab 18.

[326] Hearing Book Tab 18 [5].

[327] Hearing Book Tab 42.

[328] Hearing Book Tab 42 [2].

[329] Hearing Book Tab 42 [3]

[330] Transcript pages 815-818.

[331] Transcript page 339.

[332] Transcript page 334.

[333] Transcript page 809.

[334] Hearing Book Tab 22.

[335] Transcript page 523.

[336] Hearing Book Tab 21.

[337] Ibid [2].

[338] Transcript page 401.

[339] Transcript page 398-399.

[340] Hearing Book Tab 7; Hearing Book Tab 74.

[341] Hearing Book Tab 7 [2].

[342] Transcript page 671.

[343] Transcript page 664.

[344] Additional witnesses in this category are evaluated in the body of the reasons for decision.

[345] Hearing Book Tab 37 [4].

[346] Hearing Book Tab 37 [3].

[347] Hearing Book Tab 37 [5].

[348] Transcript page 233.

[349] Hearing Book Tab 37 [6].

[350] Hearing Book Tab.

[351] Transcript page 493.

[352] Hearing Book Tab 15 [3].

[353] Transcript page 491. In his statement, Mr Dao said at that time he still owed $139,000. Hearing Book

[354] See Hearing Book Tab 15 [4] and Mr Dao’s evidence at Transcript page 493.

[355] Transcript page 233

[356] Transcript page 224.

216. *Base penalty amount*
217. Item	218. In this situation:	219. *The base penalty amount* is:**
220. 1	221. You have a shortfall amount as a result of a statement described in subsection 284‑75(1) or (4) and the amount, or part of the amount, resulted from intentional disregard of a taxation law (other than the *Excise Acts) by you or your agent	222. 75% of your *shortfall amount or part

Date of hearing:	5 -16 December 2024 and 8 Aril 2025
Date final submissions received:	7 April 2025
Solicitors for the Applicant:	Nil
Solicitors for the Respondent:	ATO, Litigation and Legal Services