Tax Practitioner Board’s view on what constitutes a conflict of interest for a registered tax agent.
Prepare and administer tax documentation for legal entities
Table of Contents
Table of Contents 2
Assessment Information 3
Assessment Instructions 5
Student Assessment Agreement 6
Assessment Task 1 Cover Sheet 7
Assessment Task 1: Written Questions 8
Assessment Task 1 Instructions 10
Assessment Task 1 Checklist 14
Assessment Task 2 Cover Sheet 17
Assessment Task 2: Taxation requirements project 18
Assessment Task 2 Instructions 20
Assessment Task 2 Checklist 25
Assessment Task 3 Cover Sheet 27
Assessment Task 3: Case studies 28
Assessment Task 3 Instructions 29
Assessment Task 3 Checklist 32
Assessment Information
The assessment tasks for FNSACC601 Prepare and administer tax documentation for legal entities are included in this Student Assessment Tasks booklet and outlined in the assessment plan below.
To be assessed as competent for this unit, you must complete all of the assessment tasks satisfactorily.
Assessment Plan
Assessment Task Overview
1: Written Questions You must answer all questions correctly.
2: Taxation requirements project You must conduct research and prepare a tax return for a client, DCB Consulting Pty Ltd. Students will also participate in a roleplay meeting to finalise the tax return.
3: Case studies You must answer questions and complete calculations relating to tax return preparations for two case studies relating to partnerships and trusts.
Assessment Preparation
Please read through this assessment thoroughly before beginning any tasks. Ask your assessor for clarification if you have any questions at all.
When you have read and understood this unit’s assessment tasks, print out the Student Assessment
Agreement. Fill it out, sign it, and hand it to your assessor, who will countersign it and then keep it on file.
Keep a copy of all of your work, as the work submitted to your assessor will not be returned to you.
Assessment appeals
If you do not agree with an assessment decision, you can make an assessment appeal as per your RTO’s assessment appeals process.
You have the right to appeal the outcome of assessment decisions if they feel they have been dealt with unfairly or have other appropriate grounds for an appeal.
Naming electronic documents
It is important that you name the documents that you create for this Assessment Task in a logical manner. Each should include:
• Course identification code
• Assessment Task number
• Document title (if appropriate)
• Student name
• Date it was created
For example, FNSACC601 AT2 Company Tax Analysis Joan Smith 20/10/18
Additional Resources
You will be provided with the following resources before you begin Assessment Task 2
• Briefing Report Template
• Client Information (after successful completion of activity 3)
• Company Tax Analysis Template
• Company Tax Return (to be downloaded from ATO web site)
Assessment Instructions
Each assessment task in this booklet consists of the following:
Assessment Task Cover Sheet
This must be filled out, signed and submitted together with your assessment responses.
If you are submitting hardcopy, the Cover Sheet should be the first page of each task’s submission.
If you are submitting electronically, print out the cover sheet, fill it out and sign it, then scan this and submit the file.
The Assessment Task Cover Sheet will be returned to you with the outcome of the assessment, which will be satisfactory (S) or unsatisfactory (U). If your work has been assessed as being not satisfactory, your assessor will include written feedback in the Assessment Task Cover Sheet giving reasons why. Your assessor will also discuss this verbally with you and provide advice on re-assessment opportunities as per your RTO’s re-assessment policy.
Depending on the task, this may include
• resubmitting incorrect answers to questions (such as short answer questions and case studies)
• resubmitting part or all of a project, depending on how the error impacts on the total outcome of the task
• redoing a role play after being provided with appropriate feedback about your performance
• being observed a second (or third time) undertaking any tasks/activities that were not satisfactorily completed the first time, after being provided with appropriate feedback.
Assessment Task Information
This gives you:
• a summary of the assessment task
• information on the resources to be used
• submission requirements
• re-submission opportunities if required
Assessment Task Instructions
These give questions to answer or tasks which are to be completed.
Your answers need to be typed up using software as indicated in the Assessment Task Instructions.
Copy and paste each task’s instructions into a new document and use this as the basis for your assessment task submission. Include this document’s header and footer.
If you are submitting electronically, give the document a file name that includes the unit identification number, the task number, your name and the date.
Checklist
This will be used by your assessor to mark your assessment. Read through this as part of your preparation before beginning the assessment task. It will give you a good idea of what your assessor will be looking for when marking your responses.
Student Assessment Agreement
Make sure you read through the assessments in this booklet before you fill out and sign the agreement below.
If there is anything that you are unsure of, consult your assessor prior to signing this agreement.
Have you read the assessment requirements for this unit? • Yes • No
Do you understand the requirements of the assessments for this unit? • Yes • No
Do you agree to the way in which you are being assessed? • Yes • No
Do you have any specific needs that should be considered? If so, explain these in the space below.
• Yes • No
Do you understand your rights to re-assessment? • Yes • No
Do you understand your right to appeal the decisions made in an assessment? • Yes • No
Student name
Student number
Student signature
Date
Assessor name
Assessor signature
Date
Assessment Task 1 Cover Sheet
Student Declaration
To be filled out and submitted with assessment responses
• I declare that this task is all my own work and I have not cheated or plagiarised the work or colluded with any other student(s).
• I understand that if I If I am found to have plagiarised, cheated or colluded, action will be taken against me according to the process explained to me.
• I have correctly referenced all resources and reference texts throughout these assessment tasks.
Student name
Student ID number
Student signature
Date
Assessor declaration
• I hereby certify that this student has been assessed by me and that the assessment has been carried out according to the required assessment procedures.
Assessor name
Assessor signature
Date
Assessment outcome S NS DNS Resubmission Y N
Feedback
Student result response
• My performance in this assessment task has been discussed and explained to me.
• I would like to appeal this assessment decision.
Student signature
Date
A copy of this page must be supplied to the office and kept in the student’s file with the evidence.
Assessment Task 1: Written Questions
Task summary
This is an open book test, to be completed in the classroom.
A time limit of 2 hour to answer the questions is provided.
You need to answer all of the written questions correctly.
Your answers must be word processed and sent to the assessor as an email attachment.
Required
• Access to textbooks/other learning materials
• Computer and Microsoft Office
• Access to the internet
Timing
Your assessor will advise you of the due date of this assessment.
Submit
• Answers to all questions
Assessment criteria
All questions must be answered correctly in order for you to be assessed as having completed the task satisfactorily.
Re-submission opportunities
You will be provided feedback on their performance by the Assessor. The feedback will indicate if you have satisfactorily addressed the requirements of each part of this task.
If any parts of the task are not satisfactorily completed, the assessor will explain why, and provide you written feedback along with guidance on what you must undertake to demonstrate satisfactory performance. Re-assessment attempt(s) will be arranged at a later time and date.
You have the right to appeal the outcome of assessment decisions if you feel that you have been dealt with unfairly or have other appropriate grounds for an appeal.
You are encouraged to consult with the assessor prior to attempting this task if you do not understand any part of this task or if you have any learning issues or needs that may hinder you when attempting any part of the assessment.
Written answer question guidance
The following written questions use a range of “instructional words” such as “identify” or “explain”, which tell you how you should answer the question. Use the definitions below to assist you to provide the type of response expected.
Note that the following guidance is the minimum level of response required.
Analyse – when a question asks you to analyse something, you should do so in in detail, and identify important points and key features. Generally, you are expected to write a response one or two paragraphs long.
Compare – when a question asks you to compare something, you will need to show how two or more things are similar, ensuring that you also indicate the relevance of the consequences. Generally, you are expected to write a response one or two paragraphs long.
Contrast – when a question asks you to contrast something, you will need to show how two or more things are different, ensuring you indicate the relevance or the consequences. Generally, you are expected to write a response one or two paragraphs long.
Discuss – when a question asks you to discuss something, you are required to point out important issues or features and express some form of critical judgement. Generally, you are expected to write a response one or two paragraphs long.
Describe – when a question asks you to describe something, you should state the most noticeable qualities or features. Generally, you are expected to write a response two or three sentences long.
Evaluate – when a question asks you to evaluate something, you should do so putting forward arguments for and against something. Generally, you are expected to write a response one or two paragraphs long.
Examine – when a question asks you to examine something, this is similar to “analyse”, where you should provide a detailed response with key points and features and provide critical analysis. Generally, you are expected to write a response one or two paragraphs long.
Explain – when a question asks you to explain something, you should make clear how or why something happened or the way it is. Generally, you are expected to write a response two or three sentences long.
Identify – when a question asks you to identify something, this means that you are asked to briefly describe the required information. Generally, you are expected to write a response two or three sentences long.
List – when a question asks you to list something, this means that you are asked to briefly state information in a list format.
Outline – when a question asks you to outline something, this means giving only the main points, Generally, you are expected to write a response a few sentences long.
Summarise – when a question asks you to summarise something, this means (like “outline”) only giving the main points. Generally, you are expected to write a response a few sentences long.
Assessment Task 1 Instructions
Provide answers to all of the questions below:
1. Explain the Tax Practitioner Board’s view on what constitutes a conflict of interest for a registered tax agent. Provide an example of what could be considered a conflict of interest.
2. Outline at least three ways that conflicts of interest should be managed by tax agents. In relation to the conflict that you identified above, explain how this conflict should be managed.
3. Explain the academic qualifications and relevant experience requirements for tax agents to be to be registered under the Tax Agent Services Regulations 2009
4. Explain the requirement for continuing professional development for tax agents.
5. Outline the role of the Board of Taxation and its key focus areas.
6. Outline the Corporate Tax Transparency Code Register.
7. Review the video at the following link and in your own words, explain the purpose and scope of the new diverted profit tax.
http://budget.gov.au/2016-17/content/glossies/tax_super/html/tax_super-01.htm
8. Explain the right of a taxpayer to object and the process by which an objection may be lodged to the ATO.
9. Explain the process for an external review where a taxpayer is unsatisfied with the ATO’s response to their objection.
10. Explain the process by which legislation is created, including tax legislation.
11. Explain the purpose of the Australian Constitution and the concept of separation of powers.
12. Explain the obligations of a trust regarding registering and reporting for tax and provide a reference source for this information.
13. Explain how trust income is taxed and provide a reference source for this information. https://www.ato.gov.au/General/Trusts/Trust-income/#Taxrates
14. Explain the continuing of ownership test in relation to the carrying forward of tax losses.
15. Explain the same business test in relation to the carrying forward of tax losses.
16. Explain the circumstances in which a resident company can transfer a tax loss.
17. How does the Income Taxation Assessment Act define a partnership and provide two examples of evidence that would confirm the existence of such a partnership?
18. Explain income tax requirements for partnerships under the Income Tax Assessment Act.
19. Explain in your own words the taxation ruling TR2005/7 in relation to partnership salary agreements.
20. Explain whether the following business arrangement constitutes a partnership arrangement and why or why not.
a. Sarah operates a consulting business. In the 2016/17 tax year, total consulting fees amounted to $250,000. Sarah pays her husband Daniel who stays at home looking after their children half of the consulting fees for the year, $125,000 in order to minimise the tax earned.
b. John and Bob have recently set up a catering business to which both have contributed equal start-up capital.
21. Explain the legal status and the key features of a trust business structure.
22. Outline the concept of a discretionary trust.
23. Outline the concept of a family trust.
24. Explain income tax requirements for trusts.
25. Outline the legislative provisions that must be complied with for a superannuation fund to receive tax concessions, in effect to be a complying superannuation fund.
26. List the contributions that are not considered as assessable income for a complying superannuation fund.
27. Outline taxation rates for complying and non-complying superannuation funds.
28. Outline the capital gains methods that a complying superannuation fund may use.
29. Outline tax return requirements for superannuation funds.
30. Explain fringe benefits and give two examples of fringe benefits.
31. Provide five examples of fringe benefits tax excluded benefits.
32. Calculate the FBT payable in the current year where an employer pays for an employee’s access to a car park. The total car parking fees for the year ending 2017 are $2,200 including GST. Explain each part of your calculations.
33. Explain when the CGT discount method should be used and how to calculate the capital gain using this method.
34. Explain the GST margin scheme and the methods that can be used to work out the margin.
35. Outline the concept of Double Tax Agreements.
36. Provide a summary of the taxation rules in relation to controlled foreign companies.
37. Explain why the ATO may decide to conduct a tax audit.
38. Review the Tax Payers’ charter ‘If you’re subject to review or audit’. If the tax office contacted wishing to arrange an audit, outline the ATO’s expectations with regard to cooperative behaviour.
39. Explain when tax is due for individuals, partnerships and trusts under the Income Tax Assessment Act
40. Explain when tax is due for companies under the Income Tax Assessment Act
41. Explain the two accounting methods that will determine the amount included as assessable income for a legal entity.
Assessment Task 1 Checklist
Student’s name:
Did the student provide a sufficient and clear answer that addresses the suggested answer for: Completed successfully Comments
Yes No
Question 1
Question 2
Question 3
Question 4
Question 5
Question 6
Question 7
Question 8
Question 9
Question 10
Question 11
Question 12
Question 13
Question 14
Question 15
Question 16
Question 17
Question 18
Question 19
Question 20 a
Question 20 b
Question 21
Question 22
Question 23
Question 24
Question 25
Question 26
Question 27
Question 28
Question 29
Question 30
Question 31
Question 33
Question 34
Question 35
Question 36
Question 37
Question 38
Question 39
Question 40
Question 41
Task Outcome: Satisfactory • Not Satisfactory •
Assessor signature
Assessor name
Date
Assessment Task 2 Cover Sheet
Student Declaration
To be filled out and submitted with assessment responses
• I declare that this task is all my own work and I have not cheated or plagiarised the work or colluded with any other student(s).
• I understand that if I If I am found to have plagiarised, cheated or colluded, action will be taken against me according to the process explained to me.
• I have correctly referenced all resources and reference texts throughout these assessment tasks.
Student name
Student ID number
Student signature
Date
Assessor declaration
• I hereby certify that this student has been assessed by me and that the assessment has been carried out according to the required assessment procedures.
Assessor name
Assessor signature
Date
Assessment outcome S NS DNS Resubmission Y N
Feedback
Student result response
• My performance in this assessment task has been discussed and explained to me.
• I would like to appeal this assessment decision.
Student signature
Date
A copy of this page must be supplied to the office and kept in the student’s file with the evidence.
Assessment Task 2: Taxation requirements project
Task summary
This assessment task requires you to identify and research taxation requirements for a client based on information provided to you, analyse the data provided and prepare tax documentation. You will also be required to present the tax documentation to the client and obtain the client’s authorisation, as well as lodge the return.
This assessment is to be completed in the simulated work environment in the RTO.
Required
• Briefing Report Template
• Client Information (after successful completion of activity 3)
• Company Tax Analysis Template
• Company Tax Return (sourced from www.ato.gov.au)
Timing
Your assessor will advise you of the due date of these submissions.
Submit
• Email with Briefing Report attached
• Email in response to a client enquiry.
• Email with Company Tax Analysis attached.
• Hard copy of completed Company Tax Return
• Email with Company Tax Return Scan and screen shot attached
Assessment criteria
For your performance to be deemed satisfactory in this assessment task, you must satisfactorily address all of the assessment criteria. If part of this task is not satisfactorily completed, you will be asked to complete further assessment to demonstrate competence.
Re-submission opportunities
You will be provided feedback on their performance by the Assessor. The feedback will indicate if you have satisfactorily addressed the requirements of each part of this task.
If any parts of the task are not satisfactorily completed, the assessor will explain why, and provide you written feedback along with guidance on what you must undertake to demonstrate satisfactory performance. Re-assessment attempt(s) will be arranged at a later time and date.
You have the right to appeal the outcome of assessment decisions if you feel that you have been dealt with unfairly or have other appropriate grounds for an appeal.
You are encouraged to consult with the assessor prior to attempting this task if you do not understand any part of this task or if you have any learning issues or needs that may hinder you when attempting any part of the assessment.
Assessment Task 2 Instructions
Carefully read the following:
Burleigh Accountants is a small company operating out of Burleigh Heads, Queensland. It is August 2017, you have recently commenced in the position of Junior Accountant, and have been assigned to complete the tax return for a client, DCB Consulting Pty Ltd.
Your manager has asked you to first write a short report on the company’s tax obligations. When they are confident that you have understood these, you will be sent a document with DCB Consulting’s figures. From that data, you will calculate the company’s tax obligations. After sending these to your manager for confirmation, you will meet with the client, whom you will explain the figures to, and ask to sign the Tax Return.
Complete the following activities:
1. Write a briefing report on client tax obligations
Review the information provided to you for the client and conduct research to confirm up-to-date taxation requirements to ensure that the company tax return is correctly prepared.
You are required to document this information in a short briefing report to be provided to your assessor to demonstrate that you have correctly identified the taxation requirements for the client.
Use the Briefing Report Template to guide your work.
Your briefing report must address each of the following for each client:
• The name of the client and the client’s company structure
• Annual income tax return requirements relevant to the business entity type (you must specify the documentation that must be used by the client for the tax return) https://www.ato.gov.au/Business/Reports-and-returns/Income-tax-return/
• Due dates for lodging and paying, as well as ways of lodging:
https://www.ato.gov.au/Business/Reports-and-returns/Due-dates-for-lodging-and-paying/
• Up to date income and deduction information relevant to the client https://www.ato.gov.au/Business/Income-and-deductions-for-business/
• Information required from the client in order to complete the tax return. You will be assessed on your ability to identify which company documents you will need for this.
Your report should include links to show the sources of the information that you have used.
Save the document as Briefing Report.
2. Send an email to your Manager (your assessor).
The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.
It should introduce and summarise the contents of the attachment.
Attach your briefing report to the email.
Your assessor will review your work. If you have not identified all of the requirements correctly, you will need to resubmit your work before you can move onto the next part of the assessment.
Your assessor will respond by providing you with the necessary client information documented in your report.
3. Write a company tax analysis
The next part of the assessment requires you to review the Customer Information, analyse the client’s data and calculate their tax obligations.
Perform the calculations for all he figures that will be entered into the company tax return form.
You should show all of your workings and ensure that all of your calculations are clearly attributed to each part of the tax return e.g. Income = XX, Expenses = XX.
Use the Draft Company Tax Analysis Template to guide your work.
Note that there will be at least one discrepancy within the figures. You will need to clarify this with the client via email in the next activity.
For all the calculations, you should also provide notes on the assumptions that you have made based on up-to-date ATO information/rulings that you researched in activity 1.
Save this document as Company Tax Analysis.
Before you get the opportunity to contact the client to clarify the discrepancy that you found, you receive the following email from them:
Dear City Accountants
In the upcoming tax year, we will be undertaking significant research and development into new cutting-edge software and we expect Australia to become a world leader in this field. We have already expended approximately $5,000 in the tax year 2016/2017 as preliminary spending. This amount was essentially a staff member’s time.
As we expect this to be a significant expenditure, can you advise of any tax concessions we may be eligible for 2016/2017 or future tax years and what we would need to do to be eligible for these?
Thanks
David
4. Send an email to the client (your assessor).
You will need to conduct further research to identify ATO requirements/rulings with regard to the client enquiry.
The text of the email should give the client relevant information about the development tax incentive.
The text should also ask for clarification on the discrepancy within the figures you received.
The email should be in grammatically correct English, written in a polite, business-like style.
Your assessor, in the role of your client, will respond to your email with the requested information.
5. Send an email to your assessor.
When you have received a response from the client, incorporate their response (if necessary) into the Draft Company Tax Analysis.
Whether or not you make changes to the document, save it as a new document called just Company Tax Analysis in the same folder.
The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.
It should introduce and summarise the contents of the attachment and seek advice and guidance on the decision-making processes you have made in relation to your calculations.
Attach your Company Tax Analysis to this to the email.
Your assessor will advise you by return email as to whether any modifications must be made to your calculations. If so, you will need to make the required modifications as indicated and resubmit the report.
6. Fill out the Company Tax Return.
You are required to download a company tax return that you have sourced from:
www.ato.gov.au
Then, when you have received a positive response from your client, use the data that you now have to fill out the Company Tax Return, leaving the space for the client’s signature empty.
7. Participate in a meeting with the Client.
The next part of this assessment requires you to participate in a roleplay meeting with your assessor playing the role of the client.
• Begin the meeting by introducing yourself and what you will be speaking about.
• You will then explain the data entered into the tax return, including the basis on which the calculations have been made.
• Explain the client’s taxable income payable and the relevant lodgement date.
• Advise the client of their current tax obligations, and that any advice that they may receive from taxation authorities is to be followed.
• Before you conclude the meeting, ensure that the client, following confirmation of the documentation, signs the tax return form.
During the meeting, you are required to demonstrate effective communication skills as follows:
• Use of appropriate style (formal), tone (encouraging, respectful) and vocabulary (professional, business language
• Speaking clearly and concisely
• Using non-verbal communication to assist with understanding
• Asking questions to identify required information
• Responding to questions as required
• Using active listening techniques to confirm understanding
8. Lodge tax return.
When you have completed the meeting and the company tax return form has been signed, scan the document, and save it as Company Tax Return Scan.
You must find out the address for postal lodgement of the tax return, place the hard copy in an envelope and give this to your assessor.
9. Take a screen shot of your folder and files.
This activity requires you to demonstrate that you can file all of your records in a logical structure.
Ensure that you have an overall, appropriately named folder for your work, as well as sub folders if necessary.
All of the documents you have submitted for this assessment task should be correctly named and filed.
The screen shot should show all the folders and documents.
10. Send an email to your Manager (your assessor).
The text of the email should be in grammatically correct English, written in a polite and businesslike style.
The email text should give a summary of the meeting and your lodgement of the Tax Return.
Attach your Company Tax Return Scan and screen shot to the email.
Assessment Task 2 Checklist
Student’s name:
Did the student: Completed successfully Comments
Yes No
Correctly identify the organisational structure of the client in the briefing report?
Correctly identify up to date income taxation requirements relevant to the client’s company structure in the briefing report?
Research and report on assessable income inclusions, as well as deductions relevant to the business?
Correctly identify reporting and lodgement requirements in the briefing report?
Identify information required for preparation of tax return and request from client?
Analyse client data provided and complete required workings for preparation of figures for inclusion in the company tax return?
Identify discrepancies and conduct research to identify and report on discrepancy?
Use advice and guidance from specialist to evaluate and moderate decision processes?
Prepare company tax return using a Company Tax Return sourced from the ATO?
Present tax documentation to client and clearly explain information included and calculations to ensure tax obligations are understood?
Gain client’s authorization through signing of documentation?
During the meeting, demonstrate effective communication skills including:
• Speaking clearly and concisely
• Using non-verbal communication to assist with understanding
• Asking questions to identify required information
• Responding to questions as required
• Using active listening techniques to confirm understanding
Explain tax obligations related to R&D incentives and procedures to be followed based on research conducted?
Task Outcome: Satisfactory • Not Satisfactory •
Assessor signature
Assessor name
Date
Assessment Task 3 Cover Sheet
Student Declaration
To be filled out and submitted with assessment responses
• I declare that this task is all my own work and I have not cheated or plagiarised the work or colluded with any other student(s).
• I understand that if I If I am found to have plagiarised, cheated or colluded, action will be taken against me according to the process explained to me.
• I have correctly referenced all resources and reference texts throughout these assessment tasks.
Student name
Student ID number
Student signature
Date
Assessor declaration
• I hereby certify that this student has been assessed by me and that the assessment has been carried out according to the required assessment procedures.
Assessor name
Assessor signature
Date
Assessment outcome S NS DNS Resubmission Y N
Feedback
Student result response
• My performance in this assessment task has been discussed and explained to me.
• I would like to appeal this assessment decision.
Student signature
Date
A copy of this page must be supplied to the office and kept in the student’s file with the evidence.
Assessment Task 3: Case studies
Task summary
This assessment task requires you calculate taxable income and tax payable for two legal entities, a family trust and a partnership.
The case study questions and your responses should be copied and pasted into a new Word document. Answers must be word-processed, not handwritten. Show all of your calculations.
This assessment is to be completed in the simulated work environment in the RTO.
Required
• Computer and Microsoft Office
• Access to the internet
Timing
Your assessor will advise you of the due date of these submissions.
Submit
• Answers to case study questions
Assessment criteria
For your performance to be deemed satisfactory in this assessment task, you must satisfactorily address all of the assessment criteria. If part of this task is not satisfactorily completed, you will be asked to complete further assessment to demonstrate competence.
Re-submission opportunities
You will be provided feedback on their performance by the Assessor. The feedback will indicate if you have satisfactorily addressed the requirements of each part of this task.
If any parts of the task are not satisfactorily completed, the assessor will explain why, and provide you written feedback along with guidance on what you must undertake to demonstrate satisfactory performance. Re-assessment attempt(s) will be arranged at a later time and date.
You have the right to appeal the outcome of assessment decisions if you feel that you have been dealt with unfairly or have other appropriate grounds for an appeal.
You are encouraged to consult with the assessor prior to attempting this task if you do not understand any part of this task or if you have any learning issues or needs that may hinder you when attempting any part of the assessment.
Assessment Task 3 Instructions
Carefully read the following:
Case study 1
XYZ Trust is an inter vivos trust established by Darren Simms for his business hiring out earthmoving equipment. The trust deed stipulates the following arrangements:
• 40% to Darren’s wife Sarah
• 25% to daughter Karen (age 22, full-time professional)
• 25% to daughter Kate (aged 16, at school)
The trust deed also states that that balance is to be retained but can also be distributed according to the trustee’s wishes.
Assessable income for the trust during 2016/2017 was $450,000 with net expenses as $350,000.
Answer the following questions:
1. Explain the concept of an inter vivos trust.
2. Calculate the net trust income for the 2016/2017 tax year.
3. Who is assessed on the distribution to Kate?
4. What is the tax payable on Kate’s distribution from the trust?
5. What is the tax payable on net income retained by the trust?
Carefully read the following:
Case study 2
S&J Catering is a small catering business operating in Western Sydney. Business partners, Jack and Simon, established the business a year ago. To start up the business, the partners contributed $30,000 each. Simon is employed full-time as a chef and Jack manages the business. Simon and Jack have a written agreement that states that they will share profits or losses equally.
Income
Fees received $235,000
Capital contributed by partners $60,000
Expenses
Food supplies $60,000
Salary and wages – Jack $75,000
Superannuation $7,125
Equipment maintenance $12,000
Casual contractor payments $30,000
Office supplies $5,000
Answer the following questions:
6. Explain why the above business arrangement would be considered to be a partnership arrangement.
7. Calculate the net partnership income for the year.
8. Calculate the distribution of partnership net income based on the partnership agreement.
Some months later you receive a communication from the ATO advising that S&J Catering will be subject to an ATO review and audit.
The ATO states that newly established businesses in the hospitality industry have being singled out for closer examination, and an automatic check found that the amount of money claimed to have been used to establish S&J Catering is much lower than comparative businesses,
Jack calls you to discuss the communication from the ATO, which he has also received. He is quite stressed and wants to know more about the audit and review process. Jack explains to you that S&J Catering’s establishment costs were so low because he was given all of the necessary equipment by a friend, Adam Jones, so they had to pay for almost no equipment.
9. Write a short (half a page) letter to Jack.
The letter must advise Jack about the ATO auditing process.
Research the ATO web site and find out about:
• What is involved in a review or audit
• The difference between a review and an audit
• ATO expectation of tax payers in relation to reviews and audits
• Overview of the process for a review and audit
• Penalties, interest charges and offences
10. Write an email to the ATO on S&J Catering’s behalf.
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Table of Contents
Table of Contents 2
Assessment Information 3
Assessment Instructions 5
Student Assessment Agreement 6
Assessment Task 1 Cover Sheet 7
Assessment Task 1: Written Questions 8
Assessment Task 1 Instructions 10
Assessment Task 1 Checklist 14
Assessment Task 2 Cover Sheet 17
Assessment Task 2: Taxation requirements project 18
Assessment Task 2 Instructions 20
Assessment Task 2 Checklist 25
Assessment Task 3 Cover Sheet 27
Assessment Task 3: Case studies 28
Assessment Task 3 Instructions 29
Assessment Task 3 Checklist 32
Assessment Information
The assessment tasks for FNSACC601 Prepare and administer tax documentation for legal entities are included in this Student Assessment Tasks booklet and outlined in the assessment plan below.
To be assessed as competent for this unit, you must complete all of the assessment tasks satisfactorily.
Assessment Plan
Assessment Task Overview
1: Written Questions You must answer all questions correctly.
2: Taxation requirements project You must conduct research and prepare a tax return for a client, DCB Consulting Pty Ltd. Students will also participate in a roleplay meeting to finalise the tax return.
3: Case studies You must answer questions and complete calculations relating to tax return preparations for two case studies relating to partnerships and trusts.
Assessment Preparation
Please read through this assessment thoroughly before beginning any tasks. Ask your assessor for clarification if you have any questions at all.
When you have read and understood this unit’s assessment tasks, print out the Student Assessment
Agreement. Fill it out, sign it, and hand it to your assessor, who will countersign it and then keep it on file.
Keep a copy of all of your work, as the work submitted to your assessor will not be returned to you.
Assessment appeals
If you do not agree with an assessment decision, you can make an assessment appeal as per your RTO’s assessment appeals process.
You have the right to appeal the outcome of assessment decisions if they feel they have been dealt with unfairly or have other appropriate grounds for an appeal.
Naming electronic documents
It is important that you name the documents that you create for this Assessment Task in a logical manner. Each should include:
• Course identification code
• Assessment Task number
• Document title (if appropriate)
• Student name
• Date it was created
For example, FNSACC601 AT2 Company Tax Analysis Joan Smith 20/10/18
Additional Resources
You will be provided with the following resources before you begin Assessment Task 2
• Briefing Report Template
• Client Information (after successful completion of activity 3)
• Company Tax Analysis Template
• Company Tax Return (to be downloaded from ATO web site)
Assessment Instructions
Each assessment task in this booklet consists of the following:
Assessment Task Cover Sheet
This must be filled out, signed and submitted together with your assessment responses.
If you are submitting hardcopy, the Cover Sheet should be the first page of each task’s submission.
If you are submitting electronically, print out the cover sheet, fill it out and sign it, then scan this and submit the file.
The Assessment Task Cover Sheet will be returned to you with the outcome of the assessment, which will be satisfactory (S) or unsatisfactory (U). If your work has been assessed as being not satisfactory, your assessor will include written feedback in the Assessment Task Cover Sheet giving reasons why. Your assessor will also discuss this verbally with you and provide advice on re-assessment opportunities as per your RTO’s re-assessment policy.
Depending on the task, this may include
• resubmitting incorrect answers to questions (such as short answer questions and case studies)
• resubmitting part or all of a project, depending on how the error impacts on the total outcome of the task
• redoing a role play after being provided with appropriate feedback about your performance
• being observed a second (or third time) undertaking any tasks/activities that were not satisfactorily completed the first time, after being provided with appropriate feedback.
Assessment Task Information
This gives you:
• a summary of the assessment task
• information on the resources to be used
• submission requirements
• re-submission opportunities if required
Assessment Task Instructions
These give questions to answer or tasks which are to be completed.
Your answers need to be typed up using software as indicated in the Assessment Task Instructions.
Copy and paste each task’s instructions into a new document and use this as the basis for your assessment task submission. Include this document’s header and footer.
If you are submitting electronically, give the document a file name that includes the unit identification number, the task number, your name and the date.
Checklist
This will be used by your assessor to mark your assessment. Read through this as part of your preparation before beginning the assessment task. It will give you a good idea of what your assessor will be looking for when marking your responses.
Student Assessment Agreement
Make sure you read through the assessments in this booklet before you fill out and sign the agreement below.
If there is anything that you are unsure of, consult your assessor prior to signing this agreement.
Have you read the assessment requirements for this unit? • Yes • No
Do you understand the requirements of the assessments for this unit? • Yes • No
Do you agree to the way in which you are being assessed? • Yes • No
Do you have any specific needs that should be considered? If so, explain these in the space below.
• Yes • No
Do you understand your rights to re-assessment? • Yes • No
Do you understand your right to appeal the decisions made in an assessment? • Yes • No
Student name
Student number
Student signature
Date
Assessor name
Assessor signature
Date
Assessment Task 1 Cover Sheet
Student Declaration
To be filled out and submitted with assessment responses
• I declare that this task is all my own work and I have not cheated or plagiarised the work or colluded with any other student(s).
• I understand that if I If I am found to have plagiarised, cheated or colluded, action will be taken against me according to the process explained to me.
• I have correctly referenced all resources and reference texts throughout these assessment tasks.
Student name
Student ID number
Student signature
Date
Assessor declaration
• I hereby certify that this student has been assessed by me and that the assessment has been carried out according to the required assessment procedures.
Assessor name
Assessor signature
Date
Assessment outcome S NS DNS Resubmission Y N
Feedback
Student result response
• My performance in this assessment task has been discussed and explained to me.
• I would like to appeal this assessment decision.
Student signature
Date
A copy of this page must be supplied to the office and kept in the student’s file with the evidence.
Assessment Task 1: Written Questions
Task summary
This is an open book test, to be completed in the classroom.
A time limit of 2 hour to answer the questions is provided.
You need to answer all of the written questions correctly.
Your answers must be word processed and sent to the assessor as an email attachment.
Required
• Access to textbooks/other learning materials
• Computer and Microsoft Office
• Access to the internet
Timing
Your assessor will advise you of the due date of this assessment.
Submit
• Answers to all questions
Assessment criteria
All questions must be answered correctly in order for you to be assessed as having completed the task satisfactorily.
Re-submission opportunities
You will be provided feedback on their performance by the Assessor. The feedback will indicate if you have satisfactorily addressed the requirements of each part of this task.
If any parts of the task are not satisfactorily completed, the assessor will explain why, and provide you written feedback along with guidance on what you must undertake to demonstrate satisfactory performance. Re-assessment attempt(s) will be arranged at a later time and date.
You have the right to appeal the outcome of assessment decisions if you feel that you have been dealt with unfairly or have other appropriate grounds for an appeal.
You are encouraged to consult with the assessor prior to attempting this task if you do not understand any part of this task or if you have any learning issues or needs that may hinder you when attempting any part of the assessment.
Written answer question guidance
The following written questions use a range of “instructional words” such as “identify” or “explain”, which tell you how you should answer the question. Use the definitions below to assist you to provide the type of response expected.
Note that the following guidance is the minimum level of response required.
Analyse – when a question asks you to analyse something, you should do so in in detail, and identify important points and key features. Generally, you are expected to write a response one or two paragraphs long.
Compare – when a question asks you to compare something, you will need to show how two or more things are similar, ensuring that you also indicate the relevance of the consequences. Generally, you are expected to write a response one or two paragraphs long.
Contrast – when a question asks you to contrast something, you will need to show how two or more things are different, ensuring you indicate the relevance or the consequences. Generally, you are expected to write a response one or two paragraphs long.
Discuss – when a question asks you to discuss something, you are required to point out important issues or features and express some form of critical judgement. Generally, you are expected to write a response one or two paragraphs long.
Describe – when a question asks you to describe something, you should state the most noticeable qualities or features. Generally, you are expected to write a response two or three sentences long.
Evaluate – when a question asks you to evaluate something, you should do so putting forward arguments for and against something. Generally, you are expected to write a response one or two paragraphs long.
Examine – when a question asks you to examine something, this is similar to “analyse”, where you should provide a detailed response with key points and features and provide critical analysis. Generally, you are expected to write a response one or two paragraphs long.
Explain – when a question asks you to explain something, you should make clear how or why something happened or the way it is. Generally, you are expected to write a response two or three sentences long.
Identify – when a question asks you to identify something, this means that you are asked to briefly describe the required information. Generally, you are expected to write a response two or three sentences long.
List – when a question asks you to list something, this means that you are asked to briefly state information in a list format.
Outline – when a question asks you to outline something, this means giving only the main points, Generally, you are expected to write a response a few sentences long.
Summarise – when a question asks you to summarise something, this means (like “outline”) only giving the main points. Generally, you are expected to write a response a few sentences long.
Assessment Task 1 Instructions
Provide answers to all of the questions below:
1. Explain the Tax Practitioner Board’s view on what constitutes a conflict of interest for a registered tax agent. Provide an example of what could be considered a conflict of interest.
2. Outline at least three ways that conflicts of interest should be managed by tax agents. In relation to the conflict that you identified above, explain how this conflict should be managed.
3. Explain the academic qualifications and relevant experience requirements for tax agents to be to be registered under the Tax Agent Services Regulations 2009
4. Explain the requirement for continuing professional development for tax agents.
5. Outline the role of the Board of Taxation and its key focus areas.
6. Outline the Corporate Tax Transparency Code Register.
7. Review the video at the following link and in your own words, explain the purpose and scope of the new diverted profit tax.
http://budget.gov.au/2016-17/content/glossies/tax_super/html/tax_super-01.htm
8. Explain the right of a taxpayer to object and the process by which an objection may be lodged to the ATO.
9. Explain the process for an external review where a taxpayer is unsatisfied with the ATO’s response to their objection.
10. Explain the process by which legislation is created, including tax legislation.
11. Explain the purpose of the Australian Constitution and the concept of separation of powers.
12. Explain the obligations of a trust regarding registering and reporting for tax and provide a reference source for this information.
13. Explain how trust income is taxed and provide a reference source for this information. https://www.ato.gov.au/General/Trusts/Trust-income/#Taxrates
14. Explain the continuing of ownership test in relation to the carrying forward of tax losses.
15. Explain the same business test in relation to the carrying forward of tax losses.
16. Explain the circumstances in which a resident company can transfer a tax loss.
17. How does the Income Taxation Assessment Act define a partnership and provide two examples of evidence that would confirm the existence of such a partnership?
18. Explain income tax requirements for partnerships under the Income Tax Assessment Act.
19. Explain in your own words the taxation ruling TR2005/7 in relation to partnership salary agreements.
20. Explain whether the following business arrangement constitutes a partnership arrangement and why or why not.
a. Sarah operates a consulting business. In the 2016/17 tax year, total consulting fees amounted to $250,000. Sarah pays her husband Daniel who stays at home looking after their children half of the consulting fees for the year, $125,000 in order to minimise the tax earned.
b. John and Bob have recently set up a catering business to which both have contributed equal start-up capital.
21. Explain the legal status and the key features of a trust business structure.
22. Outline the concept of a discretionary trust.
23. Outline the concept of a family trust.
24. Explain income tax requirements for trusts.
25. Outline the legislative provisions that must be complied with for a superannuation fund to receive tax concessions, in effect to be a complying superannuation fund.
26. List the contributions that are not considered as assessable income for a complying superannuation fund.
27. Outline taxation rates for complying and non-complying superannuation funds.
28. Outline the capital gains methods that a complying superannuation fund may use.
29. Outline tax return requirements for superannuation funds.
30. Explain fringe benefits and give two examples of fringe benefits.
31. Provide five examples of fringe benefits tax excluded benefits.
32. Calculate the FBT payable in the current year where an employer pays for an employee’s access to a car park. The total car parking fees for the year ending 2017 are $2,200 including GST. Explain each part of your calculations.
33. Explain when the CGT discount method should be used and how to calculate the capital gain using this method.
34. Explain the GST margin scheme and the methods that can be used to work out the margin.
35. Outline the concept of Double Tax Agreements.
36. Provide a summary of the taxation rules in relation to controlled foreign companies.
37. Explain why the ATO may decide to conduct a tax audit.
38. Review the Tax Payers’ charter ‘If you’re subject to review or audit’. If the tax office contacted wishing to arrange an audit, outline the ATO’s expectations with regard to cooperative behaviour.
39. Explain when tax is due for individuals, partnerships and trusts under the Income Tax Assessment Act
40. Explain when tax is due for companies under the Income Tax Assessment Act
41. Explain the two accounting methods that will determine the amount included as assessable income for a legal entity.
Assessment Task 1 Checklist
Student’s name:
Did the student provide a sufficient and clear answer that addresses the suggested answer for: Completed successfully Comments
Yes No
Question 1
Question 2
Question 3
Question 4
Question 5
Question 6
Question 7
Question 8
Question 9
Question 10
Question 11
Question 12
Question 13
Question 14
Question 15
Question 16
Question 17
Question 18
Question 19
Question 20 a
Question 20 b
Question 21
Question 22
Question 23
Question 24
Question 25
Question 26
Question 27
Question 28
Question 29
Question 30
Question 31
Question 33
Question 34
Question 35
Question 36
Question 37
Question 38
Question 39
Question 40
Question 41
Task Outcome: Satisfactory • Not Satisfactory •
Assessor signature
Assessor name
Date
Assessment Task 2 Cover Sheet
Student Declaration
To be filled out and submitted with assessment responses
• I declare that this task is all my own work and I have not cheated or plagiarised the work or colluded with any other student(s).
• I understand that if I If I am found to have plagiarised, cheated or colluded, action will be taken against me according to the process explained to me.
• I have correctly referenced all resources and reference texts throughout these assessment tasks.
Student name
Student ID number
Student signature
Date
Assessor declaration
• I hereby certify that this student has been assessed by me and that the assessment has been carried out according to the required assessment procedures.
Assessor name
Assessor signature
Date
Assessment outcome S NS DNS Resubmission Y N
Feedback
Student result response
• My performance in this assessment task has been discussed and explained to me.
• I would like to appeal this assessment decision.
Student signature
Date
A copy of this page must be supplied to the office and kept in the student’s file with the evidence.
Assessment Task 2: Taxation requirements project
Task summary
This assessment task requires you to identify and research taxation requirements for a client based on information provided to you, analyse the data provided and prepare tax documentation. You will also be required to present the tax documentation to the client and obtain the client’s authorisation, as well as lodge the return.
This assessment is to be completed in the simulated work environment in the RTO.
Required
• Briefing Report Template
• Client Information (after successful completion of activity 3)
• Company Tax Analysis Template
• Company Tax Return (sourced from www.ato.gov.au)
Timing
Your assessor will advise you of the due date of these submissions.
Submit
• Email with Briefing Report attached
• Email in response to a client enquiry.
• Email with Company Tax Analysis attached.
• Hard copy of completed Company Tax Return
• Email with Company Tax Return Scan and screen shot attached
Assessment criteria
For your performance to be deemed satisfactory in this assessment task, you must satisfactorily address all of the assessment criteria. If part of this task is not satisfactorily completed, you will be asked to complete further assessment to demonstrate competence.
Re-submission opportunities
You will be provided feedback on their performance by the Assessor. The feedback will indicate if you have satisfactorily addressed the requirements of each part of this task.
If any parts of the task are not satisfactorily completed, the assessor will explain why, and provide you written feedback along with guidance on what you must undertake to demonstrate satisfactory performance. Re-assessment attempt(s) will be arranged at a later time and date.
You have the right to appeal the outcome of assessment decisions if you feel that you have been dealt with unfairly or have other appropriate grounds for an appeal.
You are encouraged to consult with the assessor prior to attempting this task if you do not understand any part of this task or if you have any learning issues or needs that may hinder you when attempting any part of the assessment.
Assessment Task 2 Instructions
Carefully read the following:
Burleigh Accountants is a small company operating out of Burleigh Heads, Queensland. It is August 2017, you have recently commenced in the position of Junior Accountant, and have been assigned to complete the tax return for a client, DCB Consulting Pty Ltd.
Your manager has asked you to first write a short report on the company’s tax obligations. When they are confident that you have understood these, you will be sent a document with DCB Consulting’s figures. From that data, you will calculate the company’s tax obligations. After sending these to your manager for confirmation, you will meet with the client, whom you will explain the figures to, and ask to sign the Tax Return.
Complete the following activities:
1. Write a briefing report on client tax obligations
Review the information provided to you for the client and conduct research to confirm up-to-date taxation requirements to ensure that the company tax return is correctly prepared.
You are required to document this information in a short briefing report to be provided to your assessor to demonstrate that you have correctly identified the taxation requirements for the client.
Use the Briefing Report Template to guide your work.
Your briefing report must address each of the following for each client:
• The name of the client and the client’s company structure
• Annual income tax return requirements relevant to the business entity type (you must specify the documentation that must be used by the client for the tax return) https://www.ato.gov.au/Business/Reports-and-returns/Income-tax-return/
• Due dates for lodging and paying, as well as ways of lodging:
https://www.ato.gov.au/Business/Reports-and-returns/Due-dates-for-lodging-and-paying/
• Up to date income and deduction information relevant to the client https://www.ato.gov.au/Business/Income-and-deductions-for-business/
• Information required from the client in order to complete the tax return. You will be assessed on your ability to identify which company documents you will need for this.
Your report should include links to show the sources of the information that you have used.
Save the document as Briefing Report.
2. Send an email to your Manager (your assessor).
The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.
It should introduce and summarise the contents of the attachment.
Attach your briefing report to the email.
Your assessor will review your work. If you have not identified all of the requirements correctly, you will need to resubmit your work before you can move onto the next part of the assessment.
Your assessor will respond by providing you with the necessary client information documented in your report.
3. Write a company tax analysis
The next part of the assessment requires you to review the Customer Information, analyse the client’s data and calculate their tax obligations.
Perform the calculations for all he figures that will be entered into the company tax return form.
You should show all of your workings and ensure that all of your calculations are clearly attributed to each part of the tax return e.g. Income = XX, Expenses = XX.
Use the Draft Company Tax Analysis Template to guide your work.
Note that there will be at least one discrepancy within the figures. You will need to clarify this with the client via email in the next activity.
For all the calculations, you should also provide notes on the assumptions that you have made based on up-to-date ATO information/rulings that you researched in activity 1.
Save this document as Company Tax Analysis.
Before you get the opportunity to contact the client to clarify the discrepancy that you found, you receive the following email from them:
Dear City Accountants
In the upcoming tax year, we will be undertaking significant research and development into new cutting-edge software and we expect Australia to become a world leader in this field. We have already expended approximately $5,000 in the tax year 2016/2017 as preliminary spending. This amount was essentially a staff member’s time.
As we expect this to be a significant expenditure, can you advise of any tax concessions we may be eligible for 2016/2017 or future tax years and what we would need to do to be eligible for these?
Thanks
David
4. Send an email to the client (your assessor).
You will need to conduct further research to identify ATO requirements/rulings with regard to the client enquiry.
The text of the email should give the client relevant information about the development tax incentive.
The text should also ask for clarification on the discrepancy within the figures you received.
The email should be in grammatically correct English, written in a polite, business-like style.
Your assessor, in the role of your client, will respond to your email with the requested information.
5. Send an email to your assessor.
When you have received a response from the client, incorporate their response (if necessary) into the Draft Company Tax Analysis.
Whether or not you make changes to the document, save it as a new document called just Company Tax Analysis in the same folder.
The text of the email should be in grammatically correct English, written in an appropriate (polite, business-like) style.
It should introduce and summarise the contents of the attachment and seek advice and guidance on the decision-making processes you have made in relation to your calculations.
Attach your Company Tax Analysis to this to the email.
Your assessor will advise you by return email as to whether any modifications must be made to your calculations. If so, you will need to make the required modifications as indicated and resubmit the report.
6. Fill out the Company Tax Return.
You are required to download a company tax return that you have sourced from:
www.ato.gov.au
Then, when you have received a positive response from your client, use the data that you now have to fill out the Company Tax Return, leaving the space for the client’s signature empty.
7. Participate in a meeting with the Client.
The next part of this assessment requires you to participate in a roleplay meeting with your assessor playing the role of the client.
• Begin the meeting by introducing yourself and what you will be speaking about.
• You will then explain the data entered into the tax return, including the basis on which the calculations have been made.
• Explain the client’s taxable income payable and the relevant lodgement date.
• Advise the client of their current tax obligations, and that any advice that they may receive from taxation authorities is to be followed.
• Before you conclude the meeting, ensure that the client, following confirmation of the documentation, signs the tax return form.
During the meeting, you are required to demonstrate effective communication skills as follows:
• Use of appropriate style (formal), tone (encouraging, respectful) and vocabulary (professional, business language
• Speaking clearly and concisely
• Using non-verbal communication to assist with understanding
• Asking questions to identify required information
• Responding to questions as required
• Using active listening techniques to confirm understanding
8. Lodge tax return.
When you have completed the meeting and the company tax return form has been signed, scan the document, and save it as Company Tax Return Scan.
You must find out the address for postal lodgement of the tax return, place the hard copy in an envelope and give this to your assessor.
9. Take a screen shot of your folder and files.
This activity requires you to demonstrate that you can file all of your records in a logical structure.
Ensure that you have an overall, appropriately named folder for your work, as well as sub folders if necessary.
All of the documents you have submitted for this assessment task should be correctly named and filed.
The screen shot should show all the folders and documents.
10. Send an email to your Manager (your assessor).
The text of the email should be in grammatically correct English, written in a polite and businesslike style.
The email text should give a summary of the meeting and your lodgement of the Tax Return.
Attach your Company Tax Return Scan and screen shot to the email.
Assessment Task 2 Checklist
Student’s name:
Did the student: Completed successfully Comments
Yes No
Correctly identify the organisational structure of the client in the briefing report?
Correctly identify up to date income taxation requirements relevant to the client’s company structure in the briefing report?
Research and report on assessable income inclusions, as well as deductions relevant to the business?
Correctly identify reporting and lodgement requirements in the briefing report?
Identify information required for preparation of tax return and request from client?
Analyse client data provided and complete required workings for preparation of figures for inclusion in the company tax return?
Identify discrepancies and conduct research to identify and report on discrepancy?
Use advice and guidance from specialist to evaluate and moderate decision processes?
Prepare company tax return using a Company Tax Return sourced from the ATO?
Present tax documentation to client and clearly explain information included and calculations to ensure tax obligations are understood?
Gain client’s authorization through signing of documentation?
During the meeting, demonstrate effective communication skills including:
• Speaking clearly and concisely
• Using non-verbal communication to assist with understanding
• Asking questions to identify required information
• Responding to questions as required
• Using active listening techniques to confirm understanding
Explain tax obligations related to R&D incentives and procedures to be followed based on research conducted?
Task Outcome: Satisfactory • Not Satisfactory •
Assessor signature
Assessor name
Date
Assessment Task 3 Cover Sheet
Student Declaration
To be filled out and submitted with assessment responses
• I declare that this task is all my own work and I have not cheated or plagiarised the work or colluded with any other student(s).
• I understand that if I If I am found to have plagiarised, cheated or colluded, action will be taken against me according to the process explained to me.
• I have correctly referenced all resources and reference texts throughout these assessment tasks.
Student name
Student ID number
Student signature
Date
Assessor declaration
• I hereby certify that this student has been assessed by me and that the assessment has been carried out according to the required assessment procedures.
Assessor name
Assessor signature
Date
Assessment outcome S NS DNS Resubmission Y N
Feedback
Student result response
• My performance in this assessment task has been discussed and explained to me.
• I would like to appeal this assessment decision.
Student signature
Date
A copy of this page must be supplied to the office and kept in the student’s file with the evidence.
Assessment Task 3: Case studies
Task summary
This assessment task requires you calculate taxable income and tax payable for two legal entities, a family trust and a partnership.
The case study questions and your responses should be copied and pasted into a new Word document. Answers must be word-processed, not handwritten. Show all of your calculations.
This assessment is to be completed in the simulated work environment in the RTO.
Required
• Computer and Microsoft Office
• Access to the internet
Timing
Your assessor will advise you of the due date of these submissions.
Submit
• Answers to case study questions
Assessment criteria
For your performance to be deemed satisfactory in this assessment task, you must satisfactorily address all of the assessment criteria. If part of this task is not satisfactorily completed, you will be asked to complete further assessment to demonstrate competence.
Re-submission opportunities
You will be provided feedback on their performance by the Assessor. The feedback will indicate if you have satisfactorily addressed the requirements of each part of this task.
If any parts of the task are not satisfactorily completed, the assessor will explain why, and provide you written feedback along with guidance on what you must undertake to demonstrate satisfactory performance. Re-assessment attempt(s) will be arranged at a later time and date.
You have the right to appeal the outcome of assessment decisions if you feel that you have been dealt with unfairly or have other appropriate grounds for an appeal.
You are encouraged to consult with the assessor prior to attempting this task if you do not understand any part of this task or if you have any learning issues or needs that may hinder you when attempting any part of the assessment.
Assessment Task 3 Instructions
Carefully read the following:
Case study 1
XYZ Trust is an inter vivos trust established by Darren Simms for his business hiring out earthmoving equipment. The trust deed stipulates the following arrangements:
• 40% to Darren’s wife Sarah
• 25% to daughter Karen (age 22, full-time professional)
• 25% to daughter Kate (aged 16, at school)
The trust deed also states that that balance is to be retained but can also be distributed according to the trustee’s wishes.
Assessable income for the trust during 2016/2017 was $450,000 with net expenses as $350,000.
Answer the following questions:
1. Explain the concept of an inter vivos trust.
2. Calculate the net trust income for the 2016/2017 tax year.
3. Who is assessed on the distribution to Kate?
4. What is the tax payable on Kate’s distribution from the trust?
5. What is the tax payable on net income retained by the trust?
Carefully read the following:
Case study 2
S&J Catering is a small catering business operating in Western Sydney. Business partners, Jack and Simon, established the business a year ago. To start up the business, the partners contributed $30,000 each. Simon is employed full-time as a chef and Jack manages the business. Simon and Jack have a written agreement that states that they will share profits or losses equally.
Income
Fees received $235,000
Capital contributed by partners $60,000
Expenses
Food supplies $60,000
Salary and wages – Jack $75,000
Superannuation $7,125
Equipment maintenance $12,000
Casual contractor payments $30,000
Office supplies $5,000
Answer the following questions:
6. Explain why the above business arrangement would be considered to be a partnership arrangement.
7. Calculate the net partnership income for the year.
8. Calculate the distribution of partnership net income based on the partnership agreement.
Some months later you receive a communication from the ATO advising that S&J Catering will be subject to an ATO review and audit.
The ATO states that newly established businesses in the hospitality industry have being singled out for closer examination, and an automatic check found that the amount of money claimed to have been used to establish S&J Catering is much lower than comparative businesses,
Jack calls you to discuss the communication from the ATO, which he has also received. He is quite stressed and wants to know more about the audit and review process. Jack explains to you that S&J Catering’s establishment costs were so low because he was given all of the necessary equipment by a friend, Adam Jones, so they had to pay for almost no equipment.
9. Write a short (half a page) letter to Jack.
The letter must advise Jack about the ATO auditing process.
Research the ATO web site and find out about:
• What is involved in a review or audit
• The difference between a review and an audit
• ATO expectation of tax payers in relation to reviews and audits
• Overview of the process for a review and audit
• Penalties, interest charges and offences
10. Write an email to the ATO on S&J Catering’s behalf.
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