Douglass v Commissioner of Taxation [2019] FCA 1246

Douglass v Commissioner of Taxation [2019] FCA 1246

Section 87-18(4) neither substitutes for nor alters the operation of the three statutory criteria of the results test in s 87-18(3); custom or practice is a relevant consideration but does not excuse failure to satisfy any criterion. The AAT did not err in its construction or application of s 87-18(4), nor in its approach to penalties for recklessness.

Parties
Applicant: Rod Douglass; First Respondent: Commissioner of Taxation; Second Respondent: Administrative Appeals Tribunal
Jurisdiction
Australia
Judgment Date
12 August 2019
Procedural Posture
Appeal on Questions of Law / Judgment After Hearing Appeal From AAT
Outcome
Appeal dismissed with costs
Legal Topics
Personal Services Income, Results Test, Personal Services Business, Penalties for Tax Shortfall, Statutory Construction
Taxation Personal Services Income Results Test Personal Services Business Penalties for Tax Shortfall Statutory Construction

Case Brief

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Parties

Rod Douglass

Applicant

Commissioner of Taxation

First Respondent

Administrative Appeals Tribunal

Second Respondent

Procedural Posture

Appeal on Questions of Law / Judgment After Hearing Appeal From AAT

Legal Issues

  1. 1 Whether the applicant’s partnership was conducting a personal services business for the purposes of the Income Tax Assessment Act 1997 (Cth) during the relevant years
  2. 2 Proper construction and application of the 'results test' in s 87-18 and effect of 'custom or practice' in s 87-18(4)
  3. 3 Whether the AAT erred in its approach to penalties for recklessness

Ratio Decidendi

Section 87-18(4) neither substitutes for nor alters the operation of the three statutory criteria of the results test in s 87-18(3); custom or practice is a relevant consideration but does not excuse failure to satisfy any criterion. The AAT did not err in its construction or application of s 87-18(4), nor in its approach to penalties for recklessness.

Court Disposition

Appeal dismissed with costs

Orders

  • The appeal be dismissed.
  • The applicant pay the first respondent's costs, as agreed or assessed.