The different types of audits we do, how we select you for an audit and what it will involve.
An abusive tax position is one that is based on an unacceptable tax position and results in a tax shortfall of more than $20,000 and has tax avoidance as a dominant purpose.
Shortfall penalties may be reduced or increased under certain circumstances.
Tax evasion may involve: evading assessment of payment of tax, using deducted tax for an unlawful purpose, failing to deduct, unlawfully obtaining a refund or payment of tax or enabling another person to obtain a refund or payment of tax - knowing they are not entitled.
The legal definition of an unacceptable tax position is one that fails to meet the standard of being, as likely as not, correct.
Tax laws require you to take reasonable care in meeting your tax obligations. Generally, this means you must take the same care that a reasonable person in the same circumstances would take. The standard doesn't require perfection on your part.
In tax matters, "gross carelessness" is behaviour that demonstrates a high degree of carelessness and disregard of the consequences.
Shortfall penalties apply to most taxes and duties. The exceptions ae student loan repayments and child support repayments by liable parents.
We'll usually issue a Notice of proposed adjustment (NOPA) before assessing shortfall penalties, but if we don't you can dispute the assessment (but not the amount) through the disputes resolution procedures.
Date published: 20 Jul 2006
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