Private ruling: Deductions - cost of managing tax affairs
Date of advice: 29 October 2025
Published: 15 December 2025
Ruling period: Year ended 30 June 20XX | Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Can you claim a deduction under section 25-5 of the Income Tax Assessment Act 1997 (ITAA 1997)for the costs you incurred in relation to the making of a voluntary disclosure by a legal practitioner? | A1: Yes. The costs you incurred in relation to the making of a voluntary disclosure are deductible as it is accepted that: • the expenses were related to managing your tax affairs, and • a legal practitioner is a recognised tax adviser as defined under subsection 995-1 of ITAA 1997. A deduction is allowable in the year in which the expenditure is incurred. Further information about the cost of managing tax affairs can be found by searching QC 72191 on ato.gov.au.

Relevant facts and circumstances: In or about May 20XX you retained the services of Person A in their capacity as a partner of a law firm, to approach the Commissioner for the purposes of making a voluntary disclosure. As Person A retains a current practicing certificate with the legal Services Board in State A, they are a legal practitioner. Person A assisted you to make a voluntary disclosure for the 20XX-20XX years, to include extra income in your income tax returns. On XX March 20XX the Commissioner issued amended assessments and penalties to you in a finalisation letter. You were charged a total of $X for Person A's services in assisting you to make the voluntary disclosure.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 25-5 | Income Tax Assessment Act 1997 section 995-1