Amend Past Returns for FEE Help

Discussion in 'Accounting & Tax' started by Carol M, 22nd May, 2020.

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  1. Carol M

    Carol M Well-Known Member

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    Hi there,
    Helping daughter and partner buy new PPOR, and it turns out he has missed out on lots of past deductions - so much for H & R Block.
    Does this sound feasible to help with his cashflow for new purchase:
    1. Amend both 2018 and 2019 Returns to include unclaimed FEE-HELP tuition fees incurred in each year for training that seems to be very relevant to the job he held at that time.
    2. Tricky bit - he bought office desk for home office (not a business, just home work) and expensive computer equipment (is in IT) and tax agent never bothered to claim anything. If he bought this post 2013, can he just claim 1/5th of it for each amended return (within 5 years of purchase date)? Is there any way he can claim for the previous unclaimed portion. i.e. buys computer in 2013, does not claim depreciation for 2014 to 2017, so 4 years are lost. Can he add that on or claim full unclaimed amount in amended returns, or is that lost, and can only claim 1/5th in 2018 return?
    3. How does he apportion personal vs home study use of computer and desk? Is it just an estimate of how much time he spent on work/study vs playing games then apportion that off the depreciation claim?
    Thanks
     
  2. wylie

    wylie Moderator Staff Member

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    I'm not trying to be smart here, but isn't he better to get recommendations for a good tax accountant who should be able to answer this and fix anything that is fixable?

    Is he going to try to fix this himself without an accountant?
     
  3. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Do you know how to determine if a course is eligible for deductible fee costs ? and then do you understand the self education rules ?

    I see a lot of these mistakes by ATO and tax advisers. The ATO is really poor on this issue except a few places. I have had run ins with many ATO staff over this and forced them to escalate it (all successful !) ATO officers often see a Fee Help and think that its means it a supported place and tell you they plan to disallow. A SUPPORTED place is generally non-deductible. A unsupported (ie full fee) place is potentially deductible IF the self education requirements are also met

    ATO : The following arent deductible.....repayments of Higher Education Loan Program (HELP) loans (although the fees paid by some HELP loans are)
    The following are deductible (if eligible for self education deductions) : tuition fees, including fees payable under FEE-HELP, VET Student Loan (formerly known as VET FEE-HELP) (but doesn't include expenses paid under HECS-HELP),

    I always refer to this and it helps convince them : Australia | StudyAssist

    The easiest way to determine if the fee is VET, HELP, Fee HELP or HECS Help is to call the adminstration team at your course provider. The ATO just see one type of account for the fees and have no idea of the differences. HECS Help is rare these days as it has been phased out for some time (2016 ?).
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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  5. Carol M

    Carol M Well-Known Member

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    Thanks. It was Terry's brilliant tax tip that helped us realize he was missing out on these deductions. Our accountant confirmed eligibility and said he can also claim back as far as 4 years with a special application, as his agent at the time told him he could not do it, but was definitely wrong. It is worth a try - his work/study fit very clearly within the criteria. Cheers
     
    Terry_w likes this.
  6. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    ATO have become aggressive on review of self education. What concerns me is the numbers of times they assume fees are non deductible becuase the student has a debt account. Three most recent all approached me aftre being applroached by ATO ((MyGov or were not clients) had been denied and sought advice and they reversed their view. Thats a worry for those who fall for the ATO view in initial discussions as they are encouraged to reduce the deduction and avoid penalties.

    MyGov poses a risk since two of these cases were clients who were contacted directly who were adamant the ATO was right. They werent. Three out of three is a poor statistic.
     
  7. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    4 years ? Usually 2 if the taxpayer is a short period of review (SPOR) taxpayer. Commissioner has no discretion to waive the 2 years (s170 ITAA36) and time limits apply to objections otherwise which reflect the 2 year / 4 year period. General view is seeking extra time prior to expiry of the 2 years is the best approach. This handicap also can apply to the Commissioner seeking to increase too. A mistake on the part of the agent may be a PI issue. I'm sure they will argue they were not given the information as their defence.

    Tip : Does the taxpayer know any family who died ? Or anyone in the family have a disc trust ? It can open the 2 years to 4. No distribution needed. Other trust assets (eg ETF or managed fund with or without income) can help too.
     
  8. Carol M

    Carol M Well-Known Member

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    What is "a PI issue" please, re mistake on part of old tax agent? No one has died, and no trusts.
     
  9. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Professional (PI) indemnity insurance. You may have grounds to consider that a loss and harm was caused through adviser oversight, mistake and negligence. Under the TPB (tax practitioners board) rules all tax advisers providing tax agent services are obliged to maintain this insurance. The TPB dont assist with such claims which need to be made (usually aftre legal advice) to the tax adviser concerned who then will notify their insurer of the claim. The insurer maay seek to defend or accept the claim. Hence the legal advice. The TPB can accept a complaint about mistake and failure to discharge obligations and adviser conduct. The new adviser may be able to remedy some of it but their fee and the effects of any loss could be covered.