Review of Tax Office Management of Part IVC litigation

Appendix 12: Cases identified as test cases or as Tax Office funded cases in material published by the Tax Office^(a)

Year of material/ or date of funding	Name of Case	Date of decision	Source — Annual Report (AR) or NTLG minutes (NTLG)?	Identified as Test case (TC) or funded case (FC)?	Tribunal/ Court	Issues	Successful party
1995/96	Commissioner of Taxation v Polla-Mounter	30/11/95	NTLG	FC	Federal Court (This case was later appealed to the Full Federal Court where the taxpayer succeeded)	Whether a scholarship payment to a footballer was assessable or exempt income	ATO
	D F C of T v Kavich and Official Trustee in Bankruptcy	8/9/96	NTLG	FC	Full Federal Court	Section 207 penalty and bankruptcy	Taxpayer
1996/97	Commissioner of Taxation v Murry	16/06/98	AR	TC	High Court	Ascertaining the goodwill component of a capital gain	ATO
	Whitaker v Federal Commissioner of Taxation	26/03/98	AR	TC	Full Federal Court (This case was later appealed to the High Court)	Whether pre and post judgement interest is assessable income	Taxpayer (in part)
	Commissioner of Taxation v Australian Airlines Ltd	26/11/96	NTLG	FC	Full Federal Court	Sales tax – meaning of exemption for schools	Taxpayer
	F C of T v Rowe	29/4/97	AR and NTLG	TC	High Court	Whether a reimbursement is assessable income	Taxpayer

(a) This table lists a total of 34 finalised cases that reached the stage of a court decision. Some cases appear more than once in this table because they were appealed to the Full Federal Court and/or to the High Court. The Tax Office has advised that during the period from 1995/96 to 2004/05 there were 44 finalised cases that received test case funding or another form of funding (other than funding that is granted where the ATO appeals against a decision of the AAT). Therefore this table (which is compiled from material that the Tax Office has made publicly available) does not list 10 finalised cases that the Tax Office has stated were funded during this period. The Tax Office has stated that secrecy provisions of the income tax legislation prevent the names of these further finalised cases being published.

This table was also prepared prior to the Tax Office’s publication on 26 March 2006 of additional information concerning funded cases (in Attachments 2 and 3 to the minutes for the National Tax Liaison Group meeting of 7 September 2005). However, these attachments do not record the names of relevant funded cases.

Year of material/ or date of funding	Name of Case	Date of decision	Source — Annual Report (AR) or NTLG minutes (NTLG)?	Identified as Test case (TC) or funded case (FC)?	Tribunal/ Court	Issues	Successful party
1997/98	No test cases are identified in annual report. However the following case are referred to in NTLG reports:
	De Luxe and Yellow Cabs Co-operative (Trading) Society Ltd & Ors v Commissioner of Taxation	28/08/97 & 15/4/98	NTLG	TC	Federal Court and Full Federal Court	Whether taxi drivers were employees of the taxi operator	Taxpayer
	National Speakers Association of Australia Inc v F C of T	25/11/97	NTLG	TC	Federal Court	Whether National Speakers Association is exempt from income tax. This issue was not considered by the court as the ATO had not made a valid private ruling	Taxpayer
	National Bus Co Pty Ltd v Commissioner of Taxation	3/03/98	NTLG	FC	Federal Court	Refunds of sales tax on goods subsequently applied for own use in repair and maintenance of buses	ATO
	Deputy Commissioner of Taxation v Gruber	24/03/98	NTLG	FC	NSW Court of Appeal	What particulars need to be on director penalty notices	Taxpayer
	Commissioner of Taxation v Ryan	2/04/98	NLTG	FC	Full Federal Court	Whether a nil assessment is an assessment	Taxpayer
	Brown v Commissioner of Taxation	30/06/98	NLTG	TC	Federal Court	Deductibility of interest on business loan after the business had ceased	Taxpayer
1998/99	Scully v F C of T	10/02/00	NTLG	TC	High Court	Whether an invalidity payment was an eligible termination payment	ATO
	Commissioner of Taxation v Kurts Development Ltd	28/08/98	NTLG	TC	Full Federal Court	How pre-development costs are treated under the trading stock provisions	ATO
	Steele v Deputy Commissioner of Taxation	4/03/99	NTLG	FC	High Court	Deductibility of interest, where property is purchased with the dual purpose of establishing a business on the property and making use of the property (currently) to derive income	Taxpayer
	Commissioner of Taxation v Brown	3/06/99	NTLG	TC	Full Federal Court	Deductibility of interest on a business loan after the business had ceased	Taxpayer
1999/00	No test cases are identified in the ATO’s annual report. However, the following cases are referred to in NTLG reports:
	Commissioner of Taxation v Ryan	3/02/00	NTLG	FC	High Court	Whether a nil assessment is an assessment	ATO
	Deputy Commissioner of Taxation v Woodhams	2/03/00	NTLG	FC	High Court	Whether due dates need to be specified in director penalty notices	ATO
	Service v Commissioner of Taxation	27/03/00	NTLG	FC	Full Federal Court	Whether directorship fees are assessable to taxpayer personally or whether taxpayer was entitled to a deduction for payments made to family company	Taxpayer
	Chong v Commissioner of Taxation	16/05/00	NTLG	FC	Federal Court	Whether Malaysian civil service pensions are assessable in Australia	ATO
2000/01	Commissioner of Taxation v Commercial Nominees of Australia Ltd	31/05/01	AR	TC	High Court	Whether prior year losses by superannuation fund are deductible	Taxpayer
	Commissioner of Taxation v Anovoy	23/04/01	AR	TC	Full Federal Court	Whether interest on funds borrowed to renovate a heritage house are deductible	ATO
	Commissioner of Taxation v Andrew Payne	8/02/01	AR	TC	High Court	Whether costs of travel between two unrelated places of work and business are deductible	ATO
2001/02	Morris v Commissioner of Taxation	14/05/02	AR	TC	Federal Court	Whether sun protection products are deductible	Taxpayer
	Hart v Commissioner of Taxation	2/11/01	AR	TC	Federal Court	Whether interest payments on a split loan are deductible	ATO
	Howland-Rose & Others v Commissioner of Taxation (the ‘Budplan’ case)	18/03/02	AR	TC	Federal Court	Whether expenses of participation in the Budplan mass marketed tax effective investment scheme were deductible	ATO
2002/03	Commissioner of Taxation v Hart	26/7/02	AR	FC	Full Federal Court^(b)	Whether interest payments on a split loan are deductible	Taxpayer
	Stone v Federal Commissioner of Taxation (“Stone’s Case”)	29/11/02 (Federal Court)	AR	FC	Federal Court (This case was also considered by the Full Federal Court but the Tax Office has confirmed that it did not fund this stage of the case)^(c)	Whether prize and grant money is assessable to a sportsperson	Taxpayer in part (in Federal Court)
	Deputy Commissioner of Taxation v Dexcam Australia Pty Ltd (in liquidation)	30/6/03	AR	FC	Full Federal Court	Application of credits for tax and priority of ATO in insolvent administrations.	ATO
2003/04	Commissioner of Taxation v Hart	27/05/04	AR	TC	High Court	Split loans – whether Part IVA applied	ATO

(b) The Tax Office has confirmed at a Law Council Workshop held on 15-17 October 2004 that this stage of the case was not funded by the Tax Office although
an earlier stage of the case was funded.

Year of material/ or date of funding	Name of Case	Date of decision	Source — Annual Report (AR) or NTLG minutes (NTLG)?	Identified as Test case (TC) or funded case (FC)?	Tribunal/ Court	Issues	Successful party
2004/05	Federal Commissioner of Taxation v Joanna Stone	26/04/05	AR	FC	High Court	Whether prize and grant money is assessable to a sportsperson	ATO
	Recoveries Trust v Federal Commissioner of Taxation	15/10/04 & 8/7/05	AR	TC	AAT and Full Federal Court	Entitlement to full input tax credits for services to collect debts and for advice on whether to acquire debts	ATO
	Federal Commissioner of Taxation v BCD Technologies Pty Ltd	2/06/05	AR	FC	Federal Court	Whether nil income tax company return under the self-assessment regime was a deemed assessment	ATO
	DP Excavation & Haulage & Ors v Federal Commissioner of Taxation	3/06/05	AR	FC	Supreme Court of NSW	Conflicting priorities in the winding up of companies	ATO

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Review of Tax Office Management of Part IVC litigation

Appendix 12: Cases identified as test cases or as Tax Office funded cases in material published by the Tax Office(a)

Appendix 12: Cases identified as test cases or as Tax Office funded cases in material published by the Tax Office^(a)