What you have to do

This assessment consists of 4 tasks. All tasks are compulsory.

The recommended textbook, OLS learning resource and web tutorials will assist you with this assessment.

Competency requirements

Students must achieve a satisfactory result in each element to pass this assessment.

If you do not satisfactorily complete any of the questions (i.e. you do not achieve the nominated passing mark for that question) then you will be required to do a gap assessment or a resubmit of the entire assessment. Please note you will not be able to attempt the assessment more than twice.

To achieve a satisfactory result in these topics you must achieve the following results for each task:

Task 1 – Interview a Client

You are a registered tax agent. Your client Lucy has attended your office to have her 2018-year tax return prepared. Lucy is 42 years old single resident taxpayer employed by Burwood Council as a clerk. Lucy is also a friend of yours.

She has the following documentation and admits that she is not good at keeping her receipts and invoices:

Payment Summary for the period 1 July 2017 to 30 June 2018 from Burwood Council

Other Information

• Lucy has a motor vehicle. Lucy has not maintained a logbook for the vehicle, and has travelled 1,000km from work to business seminars during the year. She travelled a total of 30,000km in the year and her total motor vehicle expenses were $ 12,000 for the year. She has receipts to support the MV costs.
• Lucy advises you she spent $600 on personal grooming which was essential for her job and insists that she claims this amount.
• Lucy held $2,000 for the whole year in an interest bearing account but insists that she did not receive any interest during the Lucy has not supplied any bank statements.
• Lucy sold an investment unit she purchased in January 1998 for $50,000 and sold 30 June 2016 for $55,000. She has supplied the original purchase contract and the sale contract but did not mention any rent

Required

• As the Tax Agent, what advice would you provide for the best outcomes in relation to depreciation, CGT method, car expenses method and general deductions for Lucy within the income tax law?
• As the Tax Agent, how would you handle the stance your client has taken in points 2, 3 and 4 above, refer to the Code of Conduct, include the Principle involved and the action to take in each situation?
• Briefly describe the steps you would go through as a tax agent from initially engaging a client through to lodging their return. Refer to the online learning resources on the OLS
• Advise Lucy on the due date for submitting her individual tax documentation to the ATO and explain to her the benefits of the ATO’s app for record keeping that would allow her to keep track of her

Task 2 – Audit Activity

Mr. Jack Cashman (senior) of 100 George Street Sydney 2000 lodges his own returns and does not have a tax agent. On 1 February 2018, he received an amended assessment for the year ended 30 June 2016 from the Commissioner of Taxation as a result of an ATO audit.

The amended assessment included an amount of $6,500 omitted interest from an account No 246810 held at the St George Bank in Market Street. The amended assessment imposed an amount of $3,500 additional tax and penalties.

Mr. Jack Cashman has checked his records and has ascertained that this bank account does not belong to him and he does not have any accounts at that Bank. However, he knows that his son who has the same name as himself i.e. Mr. Jack Cashman (junior) and who lives at the same address as himself does have accounts at that branch and he suspects that the account really belongs to his son.

Required:

Advise Mr. Cashman (senior) of his objection rights indicating what steps he has to take to ensure that the objection is valid.

Task 3 – Prepare an Income Tax Return

1. Please indicate the label number and/or letter on the Individual tax return where the following information would be shown:

1. Refer to the information below. You are Mr Carr’s tax agent. Based on the information below, you need to submit a hard copy of the tax return completing all relevant details. When you have completed the return, you submit it to your client for them to confirm they accept it and to obtain their signature. Print on the form in the appropriate place the name of the person signing Scan the hard copy and submit this with your assessment.

Instructions: go the ATO website (https://www.ato.gov.au/Individuals/Tax-return/2018/) for individual tax return instructions 2018. (Accessed 29 August 2018)

General Information

Mr Enzo Carr

• Mr Carr’s employer is Top Performance Tuning (Do not enter an ABN)
• Enzo is single and is a motor mechanic employed on salary and
• His Occupation Code is
• Born on 14 June
• He has no Private Health Insurance cover.
• Postal and home address is 200 Mercedes Place, Western Creek NSW 2205
• Phone 9770-2345
• Tax File Number: Do not enter
• He does not want any tax refund deposited in his bank account

Receipts

• Gross wages $64,000 (tax withheld is $20,500), employed 1/7/17 to 30/6/18
• Interest from Westpac Bank deposit $4,280 (net of $3,720 TFN tax withheld)
• Partly Franked dividends from CSR Ltd $2,400 plus $800 franking credit
• Income from part time army reserve $5,600

Payments

• Replacement of tools (each tool costs less than $100) $650
• Donations to Salvation Army $200
• Prescribed course-motor mechanical knowledge $900
• Medical expenses after reimbursement $3,500
• Protective work clothes $400
• Tax agents fee $200

Task 4 – Prepare a Company Tax Return

1. Please indicate the section numbers and/or item letters on the Company tax return where the following information would be shown:

1. You are Memory Pty Ltd.’s tax agent and must complete a Company Tax Return Form 2018 in hard copy using the following information. When you have completed the return, you submit it to your client for them to confirm they accept it and to obtain their signature. Print on the form in the appropriate place the name of the person signing it. Scan the hard copy and submit this with your

Instructions: from the ATO website (https://www.ato.gov.au/Forms/Company-tax-return- instructions-2018/ ) in Portable Document Format (PDF) download the Company tax return instructions (NAT 0656). (Accessed 29 August 2018)

General information

Memory Pty Ltd is a resident private company and is a small business entity Tax File number               Do not enter

ABN                           Do not enter

Postal Address           20 Pitt Street, Sydney NSW 2000 Main business                     Computer Consultancy Services Public Officer                       Mr John North

Phone                        9657-1234

Financial information

 Notes to accounts

• Decline in value at taxation rates is $130,000.

Balance Sheet at 30 June 2018

 Note that there was no personal services income, no internet trading, no international dealings, no overseas interests, no thin capitalisation, no foreign source income and no transactions with specified countries. The closing balance of the Franking Account at 30 June 2018 was $66,000.

Checklist

You must submit:

1. Assessment Answers (in MS WORD format)
2. Individual Tax Return (Scanned PDF file)
3. Company Tax Return (Scanned PDF file)