AAT Decisions
Partnership income: onus not discharged
19.12.2008
The AAT has held that the taxpayer, who had lodged tax returns for several income years which included assessable income from a partnership with her ex-husband, failed in discharging the onus of establishing that the share of partnership income was wrongly included in the returns (Steele v FCT [2008] AATA 1143).
The AAT said of the taxpayer’s evidence:
“On balance, I accept Mrs Steele’s evidence that she did not receive any partnership income from her husband and was not a partner in any business for the years ending 30 June 1997, 1998 and 1999. Mrs Steele gave every appearance of being a witness of truth and provided an honest account of how her returns came to be prepared. I accept that Mrs Steele may not have known that her returns contained so-called ‘partnership income’ that was additional to the income covered by her group certificates. This ignorance does not, however, excuse her from any responsibility for the information furnished in the returns lodged in her name. Mrs Steele does not deny that the copies furnished by the Commissioner were lodged by her tax agent.
The factual basis for establishing any partnership income on which to base assessment is shallow. I accept that Mrs Steele did not agree to any partnership with her ex-husband, and without consent there can be no partnership. As a roofer making personal exertion income, the Commissioner may have been justified in querying claims by her ex-husband of partnership with Mrs Steele. However, this is not at issue for the Tribunal’s review.”
Despite this, the AAT held that the taxpayer had not discharged the onus of establishing that the assessments were excessive, even if it were accepted, on balance, that the taxpayer did not receive the partnership income. It is suggested that the AAT may have imposed too high a burden of proof on the taxpayer in this case.
