Voluntary tax believer fined $15k for bogus trust deductions
The AAT has upheld penalties for "reckless" returns lodged by a Brisbane woman who questioned the legitimacy of the ATO and Australia’s tax laws.
A Brisbane woman who claimed deductions for a fake family trust because she believed paying income tax was voluntary has lost her bid to overturn a $15,220 fine from the ATO.
Lisa Bootlis claimed she should not be fined for illegally claiming $136,548 in deductions due to her personal circumstances and the fact the ATO never paid out the refund.
But these arguments were dismissed by the AAT last week, with deputy president Ian Hanger finding that “no reasonable person” could believe they were complying with tax laws while claiming deductions for a non-existent trust.
“The conduct of the applicant was, at its best for her, reckless,” he said.
Without her tax agent’s knowledge, Bootlis claimed deductions of $60,766 and $75,782 in amended returns for the 2020 and 2021 income years over a family trust that did not exist.
When the ATO intercepted the claims and demanded an explanation, Bootlis declared that income tax was voluntary and requested refunds for taxes she paid over the past 20 years.
The ATO then served her $15,220 in administrative penalties for recklessly false and misleading statements, to which Bootlis objected by again asserting income tax was voluntary in Australia.
She added that she had amended her assessments to “add a [family] trust with my live birth certificate to hopefully have some of this voluntary tax returned” but realised the process would be too expensive.
At the tribunal, Bootlis admitted to making a mistake but still sought remission of penalties due to personal circumstances, including having a son at university and being on a pension, and the fact that “the Commissioner in effect should have realised it and that she had got nothing out of it”.
The AAT was unpersuaded by Bootlis’ contention that penalties should be remitted because she derived no benefit from the attempted claim and there was no financial detriment to the ATO.
“It is true that her claim was unsuccessful in that it was rejected before any money was paid to her,” Hanger said.
“That does not alter the fact that she tried in a very blatant way to obtain a deduction to which she was not entitled.”
He said that if Bootlis’ amended returns were processed, they would have effectively reduced her income for the relevant years to almost nil.
Bootlis had failed to provide “any basis upon which she would have been entitled to those deductions – there is no taxation law which permits the entirety of one’s tax obligations be discharged merely because a family trust had been established”.
The AAT also found no grounds to support remission of the penalties, noting factors such as capacity to pay and hardship would “not usually be considered”.
“It was open to the Commissioner to not remit the administrative penalties and there is no evidence to indicate the decision should have been made differently,” Hanger said, ordering Bootlis to pay the $15,220 fine.
“Capacity to pay and hardship may be dealt with through payment arrangements, compromise, release and insolvency and under other taxation or insolvency provisions, and not remission of penalties.”
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