Problem
Stefan Hawkins has been successful with an appeal to the AAT against his income tax assessment. The basis for the challenge was $20,000 of deductions that were disallowed by the Commissioner.
The AAT indicated that the entire amount should have been properly allowed as a deduction. The Commissioner has advised that he will not seek to have the AAT decision overturned.
The amount that was challenged by Stefan comprised $8,000 of income tax, $2,000 of additional penalties, and $1,500 of general interest charge. Stefan had paid these amounts in full.
a) Explain when a taxpayer can involve the AAT in their tax matters.
b) Which of the above amounts is the ATO obliged to refund to Stefan?
c) Are there any other amounts that the ATO must pay to Stefan as a result of the AAT decision?