ACCT3016 Taxation Law

Assessment Question

Andrew Smith is a lawyer in sole practice. He operates in the Adelaide metropolitan area and employs one receptionist/secretary and two qualified lawyers.

The following information relates to Andrew’s tax affairs for the income year ending 30 June 2019. Cash received from clients for legal services provided $910,000 Accounts receivable as at 30 June 2018 $38,000 Accounts receivable as at 30 June 2019 $52,000 A bad debt amounting to $5,000 was recovered. This amount was in partial settlement of a debt of $12,000 written off in 2016.

Required In your own words and on the basis of the information provided, calculate Andrew’s assessable income for the year ended 30 June 2019. Justify your answers with reasonably arguable positions using the ‘cite, describe, apply’ approach. For the purposes of this assignment you should assume Andrew is an Australian resident individual taxpayer.

Assessment Criteria

A takes into account your ability to establish a reasonably arguable position with respect to the tax issues raised in the assignment using the ‘cite, describe, apply’ method. More specifically, the assessment criteria consist of the following:

Citations—All relevant law is cited. Descriptions—relevant law briefly described in your own words.

Application—The law is applied to the facts. No generic application. Conclusion—clear, definite and consistent with prior argument. Presentation and Layout—Logical and clear structure; Clear and consistent prose.

These are the format expectations to follow:

Headings Headings are effective for organising text by dividing a document into manageable sections.

Headings are also important sign-posts which guide the reader.

They need to be brief and descriptive, and in bold font. Use a heading for each tax issue you have identified.

Since you do not need a synopsis (or introduction) you can essentially begin the assignment straight away with your first issue and proceed with the next issue and so forth until all issues have been dealt with.

This is the style used in the topic readings. Citing cases As indicated above, cases should be cited within the text in the form illustrated by the following examples: FCT v. Clarke (1927) 40 CLR 246; Coles Myer Finance Ltd v. FCT 93 ATC 4214. All case names are to be put in italics or underlined. Where a reference is made to, or a quotation is taken from, a particular page of a case (say, page 249 of the Clarke case) that page should be cited thus: FCT v. Clarke (1927) 40 CLR 246 at 249. Where a case has been cited in full, as in the above examples, subsequent references to that case may be shortened to the name of the taxpayer party – for example, Clarke. Cases are found in various law reports, two of which are referred to in the above examples: CLR and ATC, which are the standard abbreviations of Commonwealth Law Reports and Australian Tax Cases respectively.

Take FCT v. Clarke (1927) 40 CLR 246 as an example: 1927 is the year in which the case was reported; 40 is the volume number of the Commonwealth Law Reports and 246 is the page number of that volume where the case report begins. In the case of the ATC reports, the year is also the volume number (e.g. 93 = 1993) so the general practice is to omit the year in brackets. References to legislation Mention about references to legislation is made in the introduction to the tax system study notes.