Private ruling: Managing tax affairs
Published: February 2015
Ruling period: Year ended 30 June 2012
Date scheme commenced: 1 July 2011

Ruling: Q1: Are you entitled to a deduction for the accounting fees incurred? | A1: Yes.

Relevant facts and circumstances: You received assessments. You appointed the services of a tax agent to object to the assessments. You incurred accounting fees in order to lodge the objection.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 25-5

Reasons for decision: Summary: Section 25-5 of the Income Tax Assessment Act 1997 (ITAA 1997) provides that a taxpayer can deduct expenditure they incur to the extent that the expenditure is for managing tax affairs. Section 25-5 of the ITAA 1997 does not specify what constitutes managing tax affairs. However, it is considered that it includes activities required to prepare income tax returns. In your case, you incurred accounting fees in order to object to an assessment. It is considered that the expenses are in relation to managing your tax affairs as it is associated with the preparation of your tax return. Therefore, you are entitled to a deduction for the accounting fees incurred.