Taxation for Australian Taxation Office - MyAssignmenthelp.com

Question: Discuss about theTaxation for Australian Taxation Office. Answer: Introduction to the Case The former employee of the Australian Taxation Office was the appellant in this case. She was considering retirement but did not made any formal plans. She took two consecutive leaves first, she took recreational leave and then along service leave. In her absence due to two consecutive leaves, her works were distributed and reallocated. The allocation of responsibility by the department has made her believe that her role has been redundant. Therefore, she applied for voluntary redundancy in an email to the national director of the organization. In the initial stage, the Australian taxation office did not agree with the opinion of appellant that her role was made redundant. However, at a later stage the Australian taxation office revisited their opinion and agreed to formally provide an offer of redundancy. The appellant was dismissed after a formal offer of redundancy was made by the Australian taxation office. The dispute was in the taxability of the redundancy payment made to the a pplicant. The Commissioner of tax argued that the tax that is properly payable on redundancy payment is $7825. On the other hand, the appellant argued that the tax payable on redundancy payment is nil. This was the main issue of contention between both the parties (Board 2013). Section Breached The section 83-175 of Income Tax Assessment Act 1997 is the primary provision that deals with the genuine redundancy payment. This section provides that genuine redundancy payment is the amount received by the employees on dismissal from employment after the position has become genuinely redundant. The amount that is receivable on a genuine redundancy payment should be more than the amount that is generally receivable in case of voluntary retirement (Bedford and Weeks 2016). In order to address the issue it is very important to determine whether the genuine redundancy of employment was the main reason for dismissal of the employee. The legitimate grounds for termination of employment as provided by the Public Service Act 1999 are the availability of employees in excess of the requirement of the agency and termination made in accordance with the provisions provided in the agency agreement (Ottesen 2014). The Claus 97.1 of the Agency Agreement provide that the organization will support the employees for considering other career options or provide an opportunity to leave the organization with dignity and respect if due to change in technology or the nature of the job the service of the employee has become genuinely redundant. The clause 97.2 provides that the procedures mentioned above should be followed if a replacement of the employees is required for the job. The clause 98 should be followed if the replacement of the job of the employee is not required (Flaherty 2014). Decision Analysis Tribunals Fact-Findings The Para 25 for the Tribunal decision states that the appellant was removed from the employment. In the decision of the Tribunal in Para 26 it is provided that one of the reason for dismissal of the employee is the inability of the agency to effectively utilize the service in employment. The Tribunal in para 28 provides that the job of the employee is still remaining and an officer of EL2.1 level will be required to complete the job (Sievers 2015). Therefore, it can be said that the job of the employee is needed to be performed by someone of the same level. The para 30 of the Tribunal decision states that the job of the employee has not disappeared the only change that has taken place is in the number of positions. The function of the officer is still the same as that of her level of EL2.1 level officer. In Para 29 of its decision the Tribunal argued that there is a need to make a distinction between the situation where the jobs have disappeared and the situation where the employer i s not willing to take an employee to perform the job (Gummow 2013). The Tribunal compared the facts of the case with the provision in the section 83-175(1) of the Income Tax Assessment Act 1997 and found that a position of the employee cannot be considered as redundant if the employer is unable to use a particular employee in that position. The Case Before the Judge In this case, the court has discussed the following questions of law: The court considered whether the amount paid by a statutory agency to an Australian Public Service officer for dismissal from employment should be regarded as payment for employee termination under section 83-175 of the Income Tax Assessment Act 1997. The employee was terminated by providing the reason that the agency has excess employees than its requirement under para 29 (3) of the Public Service Act 1999 (Johnson 2013). The court is also required to consider the validity of the clause 97.2 of the Agency Agreement. The main reason for considering the clause invalid is that it is inconsistent with the public service act and clause 97.1 of the agency agreement. The court is required to determine whether the amount paid by the agency for termination of employee under clause 97.1 of the agency agreement should be regarded as payment for employee termination under section 83-175 of the Income Tax Assessment Act 1997. The court is required to consider whether the agency has the power or rights to make termination payment from is consolidated reserve fund. If the agency considers that the position of the employee is not genuine redundant (Vines 2013). In the judgment, the primary judge explained that the Tribunal has failed to raise the point 2 and 3 of the topics that have been discussed earlier. In the opinion of the judge this questions cannot be regarded as a question of law, as the appeal was misconceived (Norbury 2013). The primary judge also found that the topic 1 and topic 3 has failed to raise the critical question of whether the payment made to an employee should be regarded as genuine redundancy payment under section 83-175 of the Income Tax Assessment Act 1997. The employee was terminated under section 29(3) (a) of the Public Service Act 1999 and the clause 97.1 of the agency agreement on the ground that the agency has excess employee then its requirement (Williams 2016). The Decision Consideration The appellant argued that while providing the decision that Tribunal has made errand in law. In the oral submission the appellant argued that the Tribunal was distracted by the clause 97.2 the agency agreement. In the Tribunal's decision, this clause served as an introduction to the finding of facts. These findings did not raise the question of law and was not legally impeachable as provided under section 44 of the AAT Act (Giannone 2013). The analysis shows that the section 83-175(1) of the Income Tax Assessment Act 1997 have the similar concept as the clause 97.2 of the agreement. The Tribunal tried to make a distinction between the general concept of redundancy and the narrower concept of redundancy provided under section 83-175(1) by referring to the clause 97.2 of the agency agreement. It was argued by the appellant that the Tribunal has not conducted a detailed finding of facts as was done in the case of Dibb (Tretola 2013). This has made the appellant argue that the Tribunal h as made errand of law as provided in Section 44 of the AAT Act. Therefore, it can be said that the question was raised in the manner of fact finding by the Tribunal. The Tribunal followed the policy of gathering facts by obtaining cross-examination of the evidence and written statement from the officer. In the case of Dibb, the full Court of finding of facts was appropriate as the tax appeal was first raised in court. In the current scenario, the case was first referred to the Tribunal. Therefore, it is appropriate for the Tribunal to determine the manner in which the facts should be collected for making appropriate decisions so it is not an error of law. The appellant argued that the Tribunal has misconstrued the agency agreement clause of 97.2. The analysis of the decision or the fact-finding of the Tribunal does not highlight that there has been any misconstruction of the clause 97.2 of the agency agreement or section 83-175(1) by the Tribunal. The Commissioner argued for the pur pose of clause 97.1 of the Agency agreement the employee was not required for the job. On the other hand, for the purpose of tax the commissioner argued that, as it was not a genuine redundancy payment so the employee should pay tax on the termination amount (McCormack 2013). The genuine redundancy as per section 83-175(1) can only arise if the position of the employee has become genuinely redundant. Therefore, the Tribunal is required to determine based on facts whether in the current scenario the position of the employee is genuinely redundant. The analysis shows that there is no inconsistency between the excess employee of the agency and the position of the employee becoming redundant. It can be seen that there is no difference between the language stated in section 83-175(1) and the findings of the Tribunal. It is observed that there is a coincidence between the genuine redundancy as mentioned under section 83-175(1) and the termination of employment provided under section 29(3) of the Public Service Act. Based on this it can be said that there has not been any inconsistency in the findings of the Tribunal that could give rise to error of law. The court held that the appeal should be dismissed as the appellant has failed to establish that the Tribunal has made any blunder of law (Sekhar and Gudimetla 2015). Conclusion and Summary of the Case The above discussion have shown that the payment received on dismissal is treated as employee termination payment and is taxed accordingly. The argument provided by taxpayer is that the payment received is a genuine redundancy payment under section 83-175 of the Income Tax Assessment Act 1997 so no tax is payable on the amount received. In order to resolve the dispute the taxpayer went for a private ruling but the decision was not in favor of the appellant. Then she went into appeal in AAT but was not successful in getting a favorable decision. Then at the later stage, she went to federal court for appeal (Leeser et al. 2015). It was argued by the AAT that as the position in the agency has not disappeared so the amount paid on termination cannot be treated as a genuine redundancy payment. In the latter stage, the court was in agreement with the decision by the AAT. Based on the evidence available the court argued that it is a clear case of voluntary redundancy and not genuine redundancy (Hurley and Hurley 2015). It was held by the court that the payment is genuinely redundant if the position of the employee becomes redundant as per section 83-175. The court held that the Tribunal has made the correct distinction between the position of an employee that is genuinely redundant and cases where the employer is unwilling to use the service of a particular employee. In the former case, it is a genuine redundancy and the payment made is not taxable. On the other hand, in the latter case it is not a genuine redundancy so the amount paid is not tax-free. The full Court decided that the Appeal should be rejected. It was held by the court that the payment received by the taxpayer is not tax-free as it is not genuine redundancy payment. Based on the above discussion it can be concluded that the appellant is required to pay tax on the amount received from the agency on the termination of employment. Reference Bedford, N. and Weeks, G., 2016. Doping in sport: What role for administrative law?. Board, M.A.T., 2013. John R. Melecio, Jr. v. Commissioner of Revenue. Commonwealth of Massachusetts, Appellate Tax Board. Flaherty, D.H., 2014.Protecting privacy in surveillance societies: The federal republic of Germany, Sweden, France, Canada, and the United States. UNC Press Books. Giannone, R., 2013. Gedenksschrift for Graham Hill.Austl. Tax F.,28, p.185. Gummow, W., 2013. The law of contracts, trusts and corporations as criteria of tax liability.Melb. UL Rev.,37, p.834. Hurley, P.R. and Hurley, R.E., 2015. 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