Assignment Task: Portfolio of evidence Assessment
Part A: Audio recording - Interview with the client and senior tax agent
Assignment Instructions:
In part A of this assessment you are to:
- conduct an interview with the client
- conduct a conversation with a senior tax agent.
You will need to provide an audio recording of approximately 5 -7mins for each role play.
You will need to ask two (2) people to participate in the role play. One (1) being the client Jeff Jones (briefing notes 1) and the other being the senior tax agent (briefing notes 2). These two people can be colleagues, family or friends. Throughout the roleplays, your two participants will be working from 'briefing notes' and you will need to interact with each person.
Each participant must ask you questions outlined in this assessment, as participate 1 and 2.
Ask each participant (the client and senior tax agent) to take notes and complete the feedback form below and upload it with your assessment.
Before you commence the recording, you are required to ask your participants to complete the audio consent form, which needs to be uploaded with your assessment
Research:
Prior to commencing your interviews with the client (Jeff Jones) and the senior tax agent, you are required to conduct some research by completing the below nine (9)research tasks.
Research for interview meeting with Jeff Jones
As part of your interview preparation conduct research on the following:
1. Details of the applicable legislation and guidance sources used (to be included in an appendix to the report).
2. Appropriate guidelines on record keeping requirements for an individual taxpayer (client substantiation guidance).
3. Consideration of the appropriate threshold amounts for any relevant rebates, tax offsets or additional taxes that may be required.
4. Consideration of documentation with client to obtain client signature, authorisation and endorsement, ensuring legislative requirements are met prior to engaging tax services with the clients.
5. Consideration of key accounting and tax principles relevant to the preparation of tax returns.
6. Consideration of the relevant principles for specific issues such as CGT and GST.
7. Seeking advice and guidance from a specialist to evaluate and moderate decision processes.
8. The key principles you are bound by. For example - details of what legislation might be applicable and what professional standards and principles you are bound by - discussion on the tax acts such as the ITAA 1936 and ITAA 1997 can be noted, reference to the Tax agent services Act 2009 or Tax Agent Services Regulations 2009.
9. Do some research on Redundancy pay out to Jeff and discussion on the relevant thresholds that may be applicable to Jeff.
Role play 1
Scenario:
Jeff Jones is a new client to your firm and you are meeting him for the first time to discuss taxation issues and the preparation of the required income tax returns for the current tax year.
During the role play you need to:
1. Answer all the questions that your client (Jeff) asks
2. Discuss and explain the documentation and authorization requirement prior in relation to compliance the client's income tax.
3. Ensure that the person who will be the 'senior partner' observes you while you are answering your client's questions.
In your role play interview, you should consider general information that can be requested from the client such as other family members, discussion on your background and experience (or qualifications) and other taxation matters that you feel are relevant.
Please consider the time constraints as part of your interview planning. Try to stick to the timeframes where possible. (Consider strategies you can use - such as referring to checklists you have prepared).
Role play 2
1. Answer all the senior tax agent's questions.
Briefing notes 1: Participant 1 - Client - Jeff Jones
As the client you have the following questions, also please record a transcript of your answers below.
- What documents will I need to provide you to complete my tax returns?
- What income is assessable to me? (Consider income elements including salary wage earnings, redundancy payout and investment earnings)
- Are there any consequences of my redundancy payout?
- What deductions can I claim against my employment earning as a plumber?
- What would be the tax consequences if I sold the investment property? (consideration of capital gains or losses)
- Can I claim "SAPTO rebate", are there the eligibility to claim SAPTO? Is there a tax offset related to my private health insurance? What other rebates am I entitled to?
- What investments deductions can I claim for my rental property?
- Do I need to register my business for any tax related requirements? (consider GST and other registrations such as Workcover).
- Do I need to sign any documents to authorize (consider the engagement letter to obtain signatures to collect client information; expenses declaration documents and signing in the tax return).
Briefing notes 2: Participant 2 - senior tax agent
You have just observed your new tax agent interacting with a client.
Please ask the tax agent the following questions:
1. How well did you think you went providing advice to the client? What could you have done differently?
2. Regarding the information about the possible sale of the client's property, what are the key considerations about CGT? Information to be requested includes - confirmation of the purchase date (or requesting a copy of the settlement statement), discussion on a potential net capital gain (discuss tax implications for the rental property held less than one year and more than one year), any improvements to the property, capital allowance schedules, etc.
Please provide your responses to the following statements in relation to the role play.
1. Clearly communicated the information - using suitable structure and language which incorporates appropriate technical vocabulary to suit the audience.
2. Used questioning and listening techniques to obtain feedback and confirm understanding of what has been presented.
3. The presentation was well-researched.
4. The information provided was well-researched.
5. Please provide suggestions and comments for improvement.
Part B - Written report
Read the case study below and answer the following question.
Scenario:
You are working as a tax agent and one of your clients (Julie Palmer) has come to you for assistance.
Julie is a self-employed web designer and due to her heavy work load and unpredictable working hours has not had the time to sort out her tax matters.
Julie spends a lot of time organising her business expense for tax, however she has lost a few receipts and tax invoices for the last quarter of the financial year. She explains that she is unable to provide exact dollar amounts for expenses, as listed in the table below.
Table 1:
Scenario
After lodging Julie's tax return, Julie contracts and advises you that she found the missing bank statement that lists the business expenses and payments for the period 1stApril to 30th June2018.
Upon reviewing the statement, you identified that there are some discrepancies in the expense claims made versus the actual expenses incurred.
Task: You are required to:
1. Reconcile the bank statement against the claims made by highlighting the items.
2. Identify any discrepancies, using the following table
Expense
Education expenses
Software subscription
Internet expenses
Telephone expenses
3. Identify and explain the steps you would take to address the discrepancies including your communication with your client and the regulators.
4. Draft an email to Julie Palmer
5. Draft an email to the regulator (Australia Tax Office)
Part C - Written report
Instructions
For Part C of this assessment is divided into two parts.
- Develop a set of templates for tax agents to using when meeting with clients
- Develop a report of approximately 1000-1500 words for senior management to review.
To assist you in completing this part of the assessment recommend that you refer to the Tax Agent Services Act (TASA), the Tax Agent Services Regulations (TASR) and the accounting professional body websites in your report.
Scenario
You have been employed by an accounting firm for just over twelve months. Upon reviewing the firm's policies and procedures, you have identified a lack of tools and templates to assist new tax agents, when they are gathering client information and lodging tax returns.
You have been asked to develop a set of templates and organizational policies and procedures and prepare a report for senior management to communicate how you will:
- Train of new tax agents, to reduce the number of stakeholder complaints
- Ensure that clients receive correct, consistent and professional communication in relation to information about upcoming audits
- Support tax agents with a consistent recommendation on how to respond to clients who have seen the recent advertisement by a competitor who claims that they can offer clients a strategy on how to 'pay no tax anymore'
- Support tax agent on how to clearly communicate information on Part IVA and the penalties imposed on clients,
- Communicate ethical issues that the tax agent would need to take into consideration when speaking to clients and gathering client information.
- Stress the importance of the 'Code of Conduct' for both the organisation and the client.
You have also been asked to conduct research on two recent changes to legislative requirements and include this information in your report.
- How they apply to the preparation of clients' tax documentation, consider issues such as the changes to Medicare Levy, tax rates or rebate thresholds and other legislative changes.
Standard Business Reporting (SBR) is the format digital service providers will use in their practice management software packages. Their software will need to use SBR to send reports and data to the ATO and for interactions with other government agencies.
- The practitioner lodgment service (PLS) is the main electronic lodgment channel for tax and BAS agents. The PLS provides enhanced services in tax/BAS return software. Research how you prepare, and lodge returns through PLS and monitor schedules with the ATO.
Tasks:
1. Write a short report of at least 1000 - 1500 words on how you would train new employees at your tax practice.
Your report should be structured as follows:
- Executive summary
- Introduction
- Body of the report - with the following headings
o How to obtain client signature, authorization and endorsement in accordance with TPB requirements relevant to the preparation of tax documentation with the clients. (student must consider an engagement letter to obtain client's signature and client's declarations they sign in the individual tax return)
o How to response to clients with upcoming audits
o Part IVA: the general anti-avoidance rules for income tax in Australia
o TPB Code of Professional conduct
o Recent changes in tax legislation
o Practitioner lodgment service: explain how individual tax returns are prepared, lodged and monitored through the PLS
- Conclusion
- Appendixes: see below
2. Appendixes: Develop templates for new tax agents to complete during a client meeting, when gathering tax information and preparing the client's tax returns.
- Appendix A: Draft of Engagement Letter to include client's authorisation signature
- Appendix B: New client's details checklist
- Appendix C: Tax return preparation checklist including:
o Key information requirements such as income deductions and tax offsets that may be applicable
- Appendix D: An exemplar tax return, (use the figures from Jeff's tax return) of the required tax forms (P8and other professional information parts only in business taxpayers tax returns forms): See the information included in #3 below.
- Appendix E: Sample client responses, for staff to use when responding to client queries, to ensure all outbound communication outlining the client's obligation is correct, consistent and professional.
- Appendix F: Develop a template for a general letter to clients explaining the requirements and process if they receive an audit letter from the ATO, include how to identify preliminary action they need to take
- Appendix G: Draft an organizational policy on 'Code of Conduct'
- Appendix H: Develop a procedure for applying personal services income rules and how they affect taxable income.
3. Information for worked example:
Refer to a copy of the current year individual tax return. You may download a copy of the "Schedule of Business and Professional Items" from www.ato.gov.auor see the unit resources for a tax return extract. From the following Trial Balance and Profit and Loss Statement complete Sections P8 and Other business and professional items in the form. The forms also have been attached.
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Attachment:- Tax documentation for individuals.rar