Taxation Ruling

IT 2048

Income tax - year ended 30 June 1983 - arbitrary limits section 51 deductions

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FOI status:

May be releasedFOI number: I 1104801

PREAMBLE

For some years it has been the practice for a number of employee unions, groups or associations to settle with this office the amount of deductions which may be allowed to their members without the need for verification in respect of incidental expenditure incurred by their members in the course of carrying out the duties of their various employments.

2. Last year for the first time it was decided to make available to interested taxpayers the negotiated limits that were to apply in assessments made for the year ended 30 June 1982.

RULING

3. The practice of fixing in this manner the amounts which may be allowed as income tax deductions recognizes that the duties of employment of the taxpayers concerned involve the incurring of expenditure on the specified items which is allowable as an income tax deduction. The amounts fixed reflect the expenditure which a taxpayer might reasonably be expected to incur in a year.

4. It must be stressed, however, that the practice applies in the general run of cases. It is not authority for taxpayers to claim income tax deductions in excess of the actual expenditure. For one reason or another a taxpayer may not incur expenditure in a year up to the amounts set out in the attached schedule. His or her claim for an income tax deduction should be limited accordingly. The approval of set amounts does not in anyway restrict the Commissioner's right to request substantiation in a particular case of any claim for an income tax deduction.

5. On the other hand, where a taxpayer has incurred expenditure in excess of the limit, he or she is, of course, entitled to claim as a deduction the amount actually expended. However, in that case, it would be expected that the taxpayer would be able to substantiate his or her claim in full with receipts, invoices or other documentary evidence.

6. The attached schedule lists the maximum amounts for which deductions for certain section 51 type expenditure may be allowed without verification in assessments for the year ended 30 June 1983. While the schedule contains the vast majority of the negotiated limits it is, of course, not exhaustive. This is not possible because, if for no other reason, the negotiation of limits for unvouched deductions is an ongoing process and, after publication of the schedule new or increased limits may be accepted. In addition, negotiations have been conducted in the Branch Offices on some occasions and, because of the local nature of such a decision, it may be inappropriate to include it in a ruling intended for general Australia-wide distribution.

COMMISSIONER OF TAXATION
30 June 1983

SCHEDULE TO TAXATION RULING NO. IT 204

References

ATO references:
NO 4 J35/1058 P3 F245

Subject References:
ARBITRARY LIMITS
UNVOUCHED SECTION 51 DEDUCTIONS

Legislative References:
51(1)