Commentary

A4.534 Penalties for inaccuracy—calculation of penalties

Administration and compliance

A4.534 Penalties for inaccuracy—calculation of penalties

A4.534 Penalties for inaccuracy—calculation of penalties

The amount of the penalty is expressed as a percentage of the potential lost revenue. Potential lost revenue is defined at A4.567B.1.

Summary of steps in calculation

  1.  

    (1)     ascertain the basic nature of the inaccuracy

  2.  

    (2)     ascertain the degree of culpability, whether deliberate or careless, and if deliberate, whether there were there arrangements to conceal. If the taxpayer was neither careless nor deliberate, no penalty can be imposed

  3.  

    (3)     calculate the potential lost revenue (A4.567B)

  4.  

    (4)     assess the quality of disclosure made (A4.567C)

  5.  

    (5)     establish the maximum and minimum penalty percentages by considering the

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