FNSTPB506: Apply Taxation Requirements- Case Study Assignment

Internal Code: MAS1201

Case Study Assignment:

Case Study: Scope of Advice Mr. Jack Cashman (senior) of 100 George Street Sydney 2000 lodges his own returns and does not have a tax agent. On 1 February 2015, he received an amended assessment for the year ended 30 June 2012 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. Question: i) Assuming that the original assessment was correct and Mr Cashman (senior) incorrectly did not return the interest as income, what would be the base penalty rate applied if the omission was due to: a. A lack of reasonable care complying with the taxation laws b. Recklessness in regard to the taxation laws c. Intentional disregard for taxation laws ii) As a registered Tax (financial) Adviser what limitations are placed on the services you can provide under your registration? iii) What action would you take if Mr Cashman came to you with the above situation asking for your help? iv) Mr Cashman has come to you asking about the tax implications of a complex new financial product you have never seen or heard of before. a. Should you provide tax advice related to this financial product? b. If not what should you do?